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Australia – ASIC’s Strategic Outlook 2014-15.

9 December, 2014


Legal News & Analysis – Asia Pacific – Australia – Banking & Finance


ASIC recently released its Strategic Outlook for 2014-15. The outlook sets out the key risks ahead for the markets that ASIC regulates, and how ASIC will respond in its surveillance and enforcement activities.

One of the key areas of risk that the regulator has identified is the increasing complexity of products and financial markets, driven by technology and innovation.

Complex Retail Products

Since the global financial crisis, complex products have grown in popularity. These include hybrid securities, capital protected products and other alternative investment structures or funds management products. Their complexity means that investors are prone to underestimating or not understanding the risks, or investing on the basis of poor advice. Timely and frank disclosure is key to empowering investors to make good decisions.
ASIC has said it will continue its surveillance operations, targeting advice about self-managed superannuation funds, as well as retail products such as add-on insurance, payday loans and leases for household goods.

ASIC intends to take enforcement action, accept enforceable undertakings and issue infringement notices, where appropriate, to counter misleading advertising and to ensure compliance with responsible lending obligations. The regulator will also provide guidance to issuers to ensure that disclosure to investors is high quality, adequate and relevant.

Product Distribution And Technology

Rapid technological change has enabled greater crossdistribution of financial products and the rise of a range of electronic payment channels, such as online payment facilities, contactless card payment and “virtual wallets” integrated into mobile devices, which allow the consumer to “tap and pay”. The popularity of digital currencies (eg, bitcoin) and crowd-funding is also growing (eg. Kickstarter).

In financial markets, technology has delivered efficiency and competition benefits, but also creates new challenges. These include the risk of widespread trading disruptions due to system failures, and an increase in market fragmentation through a growing number of trading venues.

ASIC intends to monitor technological developments and mitigate their risks, especially in relation to the use of high-frequency trading and dark liquidity. The regulator will take enforcement action where appropriate, when technological innovation affects investors negatively.

ASIC will also set compliance standards and provide guidance to industry on technological developments.


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For further information, please contact:


Ashley Wharton, Partner, Ashurst
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Andrew Carter, Partner, Ashurst

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Sonia Tame, Partner, Ashurst
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Mark Elvy, Partner, Ashurst
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Adrian Chai, Partner, Ashurst
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Chris Goddard, Partner, Ashurst 
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Jonathan Gordon, Partner, Ashurst
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Gareth Hughes, Partner, Ashurst
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Wen-Ts’ai Lim, Partner, Ashurst

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