The Australian Securities and Investments Commission's latest enforcement report shows that it has been focusing on culture and incentives that result in poor financial advice, irresponsible lending and mis-selling to retail investors.

The report states that in the last six months ASIC has commenced 98 investigations and completed 102; removed 39 people from financial services; issued 83 infringement notices; ordered A$159.4 million to be paid in compensation or remediation. It also says that it has charged 5 people with financial crimes; laid 47 criminal charges; charged 194 persons in summary prosecutions for strict liability offences; and laid 382 criminal charges in summary prosecutions for strict liability offences. It does not explain the difference between these last four actions.

Over the next six months, ASIC will carry on concentrating on enforcing higher standards in the financial services industry, paying particular attention to:

• responsible lending practices in the credit industry, including an emphasis on systemic breaches by licensees;
• financial advisers’ compliance with their best interests duty and obligation to provide appropriate advice to clients;
• licensees’ failure to deliver continuing advice services to financial advice customers who are paying fees to receive those services; and
• instances in which licensees claim to provide general advice to retail clients during the sale of financial products (and therefore do not need to comply with the best interests duty and related obligations), but are actually providing personal advice.

 
ASIC’s Wealth Management Project will continue to be an enforcement priority. The project seeks to improve the standards of major financial advice providers in terms of quality of advice and remediation. ASIC is proud of the significant number of investigations and 'surveillances' it has undertaken in line with this project in the last six months.