Financial Services Snapshots

Financial Markets

The future of Australia's public and private markets – ASIC shares industry feedback and next steps

On 4 June 2025, ASIC released over 50 public submissions made in response to its February 2025 discussion paper on the changing dynamics between public and private markets in Australia. The paper examined trends such as growth in private markets, the decline in public listings, and the growing significance and influence of superannuation funds.

Almost 90 submissions were received by ASIC from both domestic and international stakeholders, which was largely positive and reflected the views of industry bodies, market operators, superannuation trustees, fund managers, and other stakeholders across the industry.

This feedback was grouped into themes, which will shape further work and thinking. These include:

• both structural and cyclical factors are influencing the development of public and private markets;
• enhancements and reforms to public markets could increase their appeal and effectiveness;
• private markets are expected to continue expanding, with recognition that any regulatory approach should be balanced, developed in collaboration with industry, and consistent with global standards;
  private credit can benefit the economy and investors if managed responsibly, though further efforts may be needed to ensure its sustainable growth;
• superannuation funds have become a mature and significant force in Australia, exerting a substantial and lasting impact on markets and investment patterns; and
• there is a need for improved data collection and greater transparency in private markets, including better measurement of market size and learning from international best practices.

ASIC will announce the adoption of the proposed ideas and roadmaps for public and private markets later this year, informed by further feedback from stakeholders and ongoing market surveillance.

See: Media Release; Discussion Paper

Consumer Credit

Consumer lease industry on notice for potential compliance failures following reforms

On 22 May 2025, ASIC published its review of the consumer lease industry following the reforms to the National Consumer Credit Protection Act 2009 (Cth) (National Credit Act) implemented by the Financial Sector Reform Act 2022 (Cth) in December 2022. ASIC found a significant decline in the number and value of consumer leases. Additionally, almost 25% of consumer leases were in arrears, indicating financial vulnerability of consumers reliant on such arrangements.

The reforms were brought in response to concerns about harm to consumers due to the practices of consumer lease providers. The key reforms included:

• a protected earnings regime limiting repayments to no more than 10% of after-tax income;
• a cap on costs, limiting the total amount a provider can charge;
• an obligation for providers to consider bank statements and document their suitability assessments; and
• anti-avoidance provisions (to prevent consumer lease providers from avoiding the new obligations).

The key findings from ASIC's review included:

• several providers have stopped offering consumer leases and some have started to offer alternative regulated credit products, such as sale of goods by instalment and/or lines of credit;
• only one of the providers in the review has shown an increase in their consumer lease book. This may be due to other providers ceasing their business and leaving fewer options for consumers to access consumer lease products;
• there has been a significant reduction in the number of consumer leases held by customers using Centrepay, the total value of deductions, and deductions exceeding 10% of their after-tax income;
• 80% of repayments made to consumer lease providers were made through Centrepay;
• there appear to be inconsistent approaches across the industry to the types of fees charged to the contract, resulting in possible breaches of the cap on costs; and
• there appear to be inconsistent and deficient practices among consumer lease providers when it comes to reviewing bank statements and documenting suitability assessments.

See: Media Release

Funds management

ASIC uncovers widespread compliance plan deficiencies in the managed investment industry

On 2 June 2025, ASIC published a review on compliance deficiencies in the managed investment industry. The responsible entities (REs) reviewed combine a total of nearly $1 trillion in managed investments. The review assessed 50 compliance plans used by REs in the operation of a combined 1,471 funds and found that most failed to adequately address design and distribution obligations (DDR), internal dispute resolution (IDR) and reportable situations (RS) regimes.

Compliance plans are central in protecting retail investors by ensuring REs identify their obligations and methodically set out adequate measures to address each of them. ASIC is prompting REs to address the gaps and inadequacies in compliance plans and to take account of the key findings in its review.

See: Media Release

Licensing

ASIC renews warning for AFS licensees ahead of deadline for financial advisers

On 3 June 2025, ASIC published commentary encouraging relevant providers and their authorising AFS licensees to check all relevant information on the Financial Advisers Register. This follows a spot check conducted by ASIC focusing on the accuracy of advice provider qualifications. The accuracy of this information is critical leading up to 1 January 2026 when all providers must meet the qualifications standard. As of 28 May 2025, ASIC noted that almost one third of providers recorded on the Financial Advisers Register had either not satisfied the required qualifications standard, or their status had not been accurately reported by their licensees.

ASIC emphasised the seriousness of providing false, misleading or outdated information on the Register, reiterating that such actions can constitute a serious offence. From 1 January 2026, ASIC will undertake a compliance program using the information in the Register to determine whether individual advisers remain authorised to provide personal financial advice to retail clients. As this deadline approaches, licensees must promptly correct errors or omissions through ASIC Connect to avoid regulatory action and ensure continued compliance.

See: Media Release

Insurance

ASIC proposes to remake basic deposit and general insurance product distribution legislative instrument

On 28 May 2025, ASIC proposed to remake its legislative instrument that grants relief to Australian financial services (AFS) licensees from the requirement to appoint a distributor of basic deposit products or general insurance products. The ASIC Corporations (Basic Deposit and General Insurance Product Distribution) Instrument 2015/682 (the Instrument), is due to expire on 1 October 2025 under its automatic 'sunsetting' provision.

The Instrument reduces the regulatory burden on basic deposit product and general insurance providers by removing the usual requirements associated with appointing representatives, which reduces compliance costs and supporting wider availability. ASIC has assessed that the instrument is operating efficiently and effectively and proposes to remake the instrument for a period of five years.
ASIC is seeking feedback from stakeholders on this proposal by 5 pm AEST, 25 June 2025, via rri.consultation@asic.gov.au, with reference to CS 20 Proposed remake of basic deposit and general insurance product distribution legislative instrument (CS 20).

See: Media Release; Instrument 2015/682; CS 20

Superannuation

ASIC and APRA host Superannuation CEO Roundtables to discuss FAR

On 23 May 2025, ASIC and APRA published notes from the recent Superannuation CEO roundtables held in April 2025, which focused on the superannuation industry's preparedness for the Financial Accountability Regime (FAR). The regulators expressed confidence in the superannuation industry's FAR readiness, citing the proactive registration of accountable persons. The introduction of the FAR was recognised by the CEOs as a key driver in strengthening accountability and governance, helping the industry identify and address gaps and pain points.

The CEOs highlighted the importance of clear accountabilities, robust governance structures and well-defined descriptions, charters, succession plans and contingency planning. Scenario testing was seen as valuable for clarifying handover points and aligning KPIs and job descriptions with FAR requirements.

The CEOs emphasised the need for ongoing learning and adaptation to drive cultural change and enhance governance across the industry, and noted the importance of sustainable behavioural and cultural changes required to enhance risk culture and resilience., Finally, the CEOs called for regulatory simplification to help navigate the challenges of working under multiple regulatory regimes, including the FAR.

Ongoing collaboration between regulators and industry leaders under the FAR is critical to embed accountability and strengthen governance across the sector.

See: Media Release