Chief Executive Officer

ASIC Chair Joe Longo has accepted a request from the Commonwealth Director of Public Prosecutions for ASIC CEO Warren Day to join the CDPP on secondment as the Director’s Executive Officer, effective 1 June 2024.

The Chair said the request recognised the contribution Mr Day had made to ASIC as CEO, in particular supporting its organisational transformation since 2021.

“Warren has been a significant contributor to ASIC for more than 20 years across virtually every part of ASIC’s remit. This is an opportunity for him to bring the skills and experience he has gained at ASIC to an agency we have a shared interest in supporting and seeing succeed,” Mr Longo said.

“Since I embarked on the review of ASIC’s infrastructure and operations on my first day as ASIC Chair, Warren has played a significant leadership role, particularly with leading the organisational redesign, the delivery of our strategic and enforcement priorities, and the management of ASIC’s Executive Leadership Team.

“Warren leaves with our full support and his appointment underpins the critical institutional relationship ASIC holds with the CDPP, which is core to our enforcement work.”

At the conclusion of the CDPP secondment, Mr Day has indicated he will not return to ASIC.

The ASIC Chair said Mr Day’s secondment to the CDPP came as ASIC enters the next phase of its transformation.

Regulation and Supervision

Executive Director of Regulation and Supervision Greg Yanco will be appointed as ASIC’s Interim CEO effective 1 June 2024. Mr Yanco was previously Executive Director Markets between January 2019 and June 2023 before commencing in his current role. He has more than 30 years of experience in financial market development, regulation, and supervision.

Mr Yanco has informed the Commission that he expects to retire in mid-2025. A local and global search for a permanent CEO will commence in early 2025.

Enforcement and Compliance

Following more than 25 years of service to ASIC, Executive Director of Enforcement and Compliance Tim Mullaly has also advised that he will be retiring from ASIC at the end of July 2024.

Mr Mullaly has held executive roles at ASIC for the last 12 years, leading the Financial Services Enforcement team for 11 years and, for the last year, Enforcement and Compliance (E&C) team. In this role and as a member of ASIC’s Executive Leadership team, Mr Mullaly was critical to implementing the new E&C structure, overseeing a team of 450 staff focused on delivery of enforcement and compliance outcomes.

“Tim has for many years played a crucial role in ensuring that ASIC has maintained a strong and strategic pipeline of enforcement work. ASIC is in court every day, and we are launching new investigations every second day of the week, all aligned to the priorities we have set out,” Mr Longo said.

Local and global searches for the Executive Director Regulation and Supervision and Executive Director Enforcement and Compliance roles will commence shortly.

“Filling these positions is an opportunity for executive renewal and ASIC’s ongoing transformation towards being a modern, ambitious and confident regulator. As the ongoing impact of our work continues to be realised, we also have opportunities for exceptional leaders to drive the next phase of ASIC’s transformation,” Mr Longo said.

“I want to thank Warren and Tim for their significant contribution to ASIC over many years and thank Greg for stepping into the Interim CEO role.”

Background

ASIC’s executive leadership team is also being strengthened with the addition of a new Executive Director role for Registry and Intelligence – following the transition of Registry services back to ASIC from the ATO – as well as a Chief People and Culture Transformation Officer. ASIC also recently appointed Joanne Harper as Executive Director for Data, Digital and Technology.

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The campaign, which urges retail investors to carefully research online investment opportunities, includes a new cinema advertisement that will air nationally from today at screenings of the film.

ASIC Chief Executive Officer Warren Day said, ‘Before choosing to invest, people should familiarise themselves with the golden rules of investing and understand the associated risks. They shouldn’t believe the hype – if an investment sounds too good to be true, it probably is.

‘First-time investors should be particularly cautious and aware of the inherent volatility and complexities of market trading. Speculative stocks, by nature, are high risk, high reward, with uncertain prospects. With high-risk investments, you should be prepared to lose all of your money,’ cautioned Mr Day.

‘We encourage investors to pause and reflect before investing. Don’t get caught up in the hype. Take some time to research investment decisions, go to trusted sources for information, including moneysmart.gov.au,’ Mr Day added.

Retail investors who use social media to ramp stock prices, ‘pump and dump’ shares and engage in market manipulation, may be in breach of Australian financial services laws. Additionally, online crypto scams and apps that seek to ‘gamify’ share trading also remain on ASIC’s priority list.

ASIC’s market surveillance team continually monitors market movements in real time and will take enforcement action where misconduct is identified.

Background

In January 2021, retail investors used social media (e.g. Reddit group WallStreetBets) to ‘short squeeze’ NYSE-listed GameStop to counteract short positions held by hedge funds. This large amount of retail buying saw GameStop’s share price rise by around 2,000% in January 2021, before losing most of these gains in early February.

ASIC believes this type of short squeeze is unlikely to occur to the same extent in Australia due to our regulatory framework, controls that the Australian exchanges have in place and market practice.

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ASIC’s Chief Executive Officer, Warren Day said, ‘Our report highlights the important gatekeeping role served by ASIC’s Licensing function. It ensures applicants seeking an Australian financial services licence, credit licence or professional registration meet the high standards required to provide these regulated services.’

Between July 2022 and June 2023, ASIC:

• received 1,272 Australian financial services (AFS) licence and Australian credit licence (credit licence) applications
• finalised 1,464 AFS and credit licence applications
• granted 332 new AFS licences and 149 new credit licences
• approved 867 AFS and credit licence variation applications from existing licensees, and
• approved the registration of 118 company auditors, 44 SMSF auditors and supported the approval of 29 liquidators.

In the same period, 401 licence applications were withdrawn or rejected for lodgement, 515 licences were cancelled and 26 licences were suspended. In addition, 51 professional registration applications were withdrawn and 4 were refused.

Mr Day said, ‘We are continuing to make a number of improvements to ASIC’s Licensing processes and systems. These include increased engagement with stakeholders during the application process, ongoing work to develop a new licensing portal and streamlining our workflow systems to make it easier for stakeholders to interact with ASIC.’

Background

ASIC’s licensing report is released annually to increase transparency and provide guidance to licensees, professional auditor registrants and prospective applicants about ASIC’s licensing and professional registration decision making. The report outlines factors ASIC considers when reviewing an application, why certain information is required, and factors that may increase the time taken to assess an application.

At the beginning of this period, ASIC welcomed feedback from the Financial Regulator Assessment Authority (FRAA). The FRAA’s review looked at strategic prioritisation, planning and decision-making, surveillance and licensing, as well as ASIC’s use of data and technology in these areas. Feedback found ASIC was effective and capable across all of these areas reviewed.

ASIC is continuing to broaden its capability and implement regulatory efficiency initiatives based on the FRAA recommendations.

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Between July 2020 and June 2021, ASIC received 1,883 Australian financial services licence (AFSL) and Australian credit licence (ACL) applications (a significant increase from 1,346 the previous year). The increase was mainly due to the licensing reforms relating to insurance claims handling and debt management services.

ASIC approved 458 new AFSLs and ACLs (compared to 394 last year). ASIC also approved 537 variation applications by existing licensees (the same as last year).

As part of our licence assessments, and in addition to granting or not granting licences, we achieved other regulatory outcomes including removing or adding authorisations and imposing additional conditions on licence and auditor applicants.

ASIC Chief Operating Officer Warren Day said the report outlines our important function to ensure licence and auditor applicants are fit and proper, competent, and appropriately licensed or registered for their business activities.

‘This is to ensure that the quality of participants and their businesses providing financial services or auditing services have satisfied the statutory requirements,’ Mr Day said.

‘In 2020-21, ASIC implemented reforms requiring litigation funding scheme operators, insurance claims handling services and debt management services firms to be licensed.’

‘Importantly, the report acknowledges the impact of the ongoing COVID-19 pandemic and our continued flexibility during these times.’

Download

Report 700 Licensing and professional registration activities: 2021 update

Background

ASIC’s licensing report is released annually to increase transparency and to provide guidance to licensees, registrants and prospective applicants about ASIC’s licensing and professional registration decision making, outlines factors ASIC considers when reviewing an application, why certain information is required, and what factors may increase the time taken to assess an application.

In addition to AFS and credit licence approvals, 391 AFS and ACL applications were withdrawn or rejected for lodgement, one was refused, 563 licences were cancelled and 23 suspended.

ASIC also approved the registration of 96 company auditors, 59 SMSF auditors and registered 31 liquidators approved by the liquidator registration committee. In the same period, 29 professional registration applications were withdrawn and 11 were refused.

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• applicants that are a body corporate;
• applicants that are Australian Prudential Regulation Authority-regulated bodies; and
• applicants that are proposing to offer certain financial services or to operate in specific circumstances,

and are required to provide additional information to ASIC.

This will enable ASIC to ascertain whether it has reason to believe an applicant is likely to contravene its legislative obligations, including to deliver financial services ‘efficiently, honestly and fairly’ and to ensure that the responsible officers of a body corporate applicant are of good fame or character.

ASIC Executive Director – Assessment & Intelligence Warren Day said, ‘ASIC has reviewed the AFS licence assessment processes and has streamlined its assessment processes in some limited respects. This is designed to avoid unnecessary delays that may arise when ASIC seeks additional information during an assessment.’

Background

ASIC is currently developing a new regulatory portal that will include a new AFS licence application platform. Until this is implemented, ASIC continues to use our existing AFS licence platform.

INFO 240 provides guidance on the additional information ASIC now requires that is above and beyond what is requested in the existing AFS licence application forms.

The AFS Licensing Kit (Regulatory Guides 1, 2 and 3) remain relevant to all AFS licence applicants and applicants should have regard to this in conjunction with INFO 240.

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This follows the three-year transition period that commenced on 1 July 2013.

On 25 August 2015, ASIC issued a media release warning accountants wishing to apply for a limited AFS licence that failure to lodge applications in line with ASIC’s requirements by 1 March 2016 would result in a significant risk that their application would not be assessed and approved by 30 June 2016 (refer: 15-227MR).

ASIC is now writing to applicants for limited AFS licences who have applied since 1 March 2016 advising them that they should prepare for the contingency that their applications may not be assessed and approved by ASIC by 30 June 2016.

In cases where ASIC has received an application but has not granted a licence by then, the applicant will not be able to provide SMSF-related financial advice and dealing services. They will not be able to give such advice until they are granted a licence or they become an authorised representative of a licensee.

Senior Executive Leader, Assessment & Intelligence, Warren Day reminded accountants that after 30 June 2016, any accountant found to be providing unlicensed advice risked regulatory action. Mr Day said, ‘Providing unlicensed financial services is a criminal offence.’

Accountants who intend to get their application to ASIC before 30 June 2016 should be aware that only complete applications will be accepted for lodgement.

Background

The current ‘accountants’ exemption’ under regulation 7.1.29A of the Corporations Regulations 2001 permits ‘recognised accountants’ to provide a recommendation in relation to an SMSF, without the need for an AFS licence.

As part of the Future of Financial Advice (FOFA) reforms, this exemption will cease to apply on 1 July 2016.

Since 1 July 2013, accountants have been able to apply for the new limited AFS licence or become an authorised representative.

ASIC is currently assessing more than 300 applications for a limited AFS licence. The time it will take to assess these applications will depend on the quality of the applications, as well as the other work ASIC’s licensing team is undertaking.

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