On 18 February 2025, the Australian Securities and Investments Commission (ASIC) announced its proposal CS 16 Reportable situations – additional relief, aimed at easing the compliance burden for Australian financial services licensees (AFSLs) and Australian credit licensees (ACLs) under the reportable situations regime. The proposal introduce exemptions for minor breaches of misleading and deceptive conduct provisions and certain civil penalty contraventions.
The Australian reportable situations regime was introduced in October 2021 for financial and credit licensees in Australia, to identify, rectify, and report potential misconduct in a timely manner. The regime aims to enhance regulatory intelligence for ASIC, improve compliance standards, and protect consumers from financial misconduct.
ASIC’s proposed relief applies to financial advisers, mortgage brokers, superannuation trustees, insurers, fund managers, and other regulated entities holding AFSLs or ACLs. The relief would exempt certain breaches from reporting obligations if they meet the following criteria:
- The breach is rectified within 30 days from its occurrence, including any necessary remediation payments.
- The number of affected consumers does not exceed five.
- The total financial loss to all affected consumers does not exceed $500, including instances where the loss has been remediated.
- The breach does not involve contraventions of client money reporting rules or clearing and settlement rules.
ASIC is seeking feedback from financial licensees, industry stakeholders, and consumer protection bodies on its proposal, with submissions due by 5pm AEDST on 11 March 2025. After a series of regulatory updates, including updated guidance on compliance with the regime released in April 2023, an extension of relief measures in September 2024, and the publication of findings on industry compliance in December 2024.
AFSL and ACL holders must ensure strong internal compliance systems to continue meeting their obligations under Australia’s financial services and credit licensing framework. While ASIC’s proposed relief introduces proportionate reporting measures, it does not eliminate the requirement for licensees to maintain effective monitoring, risk management, and remediation mechanisms.
