The corporate regulator is seeking stakeholder feedback on updates to draft guidance on breach reporting reforms that aim to reduce industry misconduct.
ASIC's draft guidance is based on reforms made to the breach reporting regime under the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 and expand and clarifies the types of situations that must be reported to ASIC.
The reforms, which are expected to commence on 1 October 2021, will impact AFS licensees and are to also be extended to credit licensees.
ASIC will require licensees to lodge breach reports in a prescribed form within 30 calendar days after the licensee is aware of a reportable situation.
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There will also be an obligation to report an investigation into whether there is a reportable situation where that investigation continues for longer than 30 days and ASIC will additionally publish breach reports annually.
In addition, ASIC is seeking consultation on a draft information sheet on the notify, investigate and remediate obligations for AFS licensees who are financial advisers and credit licensees who are mortgage brokers.
"We support the reform goals to promote consistent, timely and high-quality reports. The Financial Services Royal Commission expressed concern about prolonged and repeated failures by large entities to make breach reports required by the law," ASIC deputy chair Karen Chester said.
"Breach reporting is a core component of Australia's financial services and credit regulatory framework. The reforms will better position us to act decisively to disrupt misconduct and escalating harms and identify patterns of non-compliance across industry."
The corporate regulator is expecting an increase in the number of reports as more entities will be required to report and more breaches will be subjected to reporting.
Consultation on the draft guidance and information sheet will conclude on 3 June 2021 and the final guidance will be published prior to when the obligations commence.
Last week, the Association of Financial Advisers pushed to delay the breach reporting law.