Set to commence on 1 October 2021, these key government reforms flow from the financial services royal commission and findings from the ASIC Enforcement Review Taskforce.

“We support the reform goals to promote consistent, timely and high-quality reports,” ASIC deputy chair Karen Chester said. 

“The financial services royal commission expressed concern about prolonged and repeated failures by large entities to make breach reports required by the law.

“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 the industry.”

ASIC said it expects a significant increase in the volume of reports received, as a wider range of entities will be required to report and a wider range of breaches will be subject to reporting. Entities are not required to report every instance of non-compliance or trivial breaches, but a targeted set of “reportable situations” defined under the law. 

This comes after recent warnings from the Association of Financial Advisers (AFA) that the changes will impact many small financial advice licensees, who will find it virtually impossible to comply with the increasingly complex requirements of the new breach reporting regime.

ASIC seeks public comment on the draft guidance and information sheet by 3 June 2021 and will publish final guidance before the obligations commence on 1 October 2021.