23-106MR ASIC releases updated guidance for licensees on reportable situations

On 27 April 2023, ASIC released an update to its Regulatory Guide RG 78: Breach reporting by AFS licensees and credit licensees which provides clarification and new guidance to address operational issues that have arisen since the implementation of the regime on 1 October 2021, together with an Overview of changes to RG 78 announced in April 2023 as an additional document.
As a reminder, reportable situations regime is a cornerstone of the financial services regulatory structure, and ASIC uses the reports as a critical source of regulatory intelligence to identify emerging trends of non-compliance in the industry and detect significant non-compliant behaviors early. The regime provides policy objectives for ASIC, industry, and consumers. ASIC will continue to focus on improving the operation of the regime and ensuring it meets its policy objectives. ASIC will also consult on its proposed approach to public reporting at a more granular level for the 2024 report and beyond in 2023.
ASIC’s aim is to improve consistency and quality of reporting practices by licensees and reduce regulatory burden where possible. ASIC developed the guidance following consultation with industry on practical solutions to implementation challenges, and feedback from a variety of industry associations from the banking, insurance, superannuation, financial advisers, markets, and credit sectors.
RG 78 is a guide issued by ASIC for AFS and credit licensees in Australia, providing guidance on reporting obligations for certain breaches of the law to ASIC. It outlines what information must be provided and the process for making a report, with examples and case studies provided. RG 78 also offers guidance on compliance systems for identifying, recording, and reporting breaches. It should be read in conjunction with other regulatory guides on how ASIC administers the Corporations Act 2001 and the National Consumer Credit Protection Act 2009.
The updates to RG 78 clarify circumstances in which licensees may group multiple reportable situations into one report to ASIC and provide new guidance on the information to include when licensees describe a reportable situation. ASIC is also making minor changes to the prescribed form for lodging reportable situations that were be implemented on 5 May 2023, which clarifies how some questions should be answered and points licensees to guidance available in RG 78.
The aforementioned Overview of changes to RG 78 announced in April 2023 outline the modifications made to RG 78 in Table 1. Table 2 provides a list of changes scheduled to be put into effect starting from 5 May 2023. Lastly, Table 3 identifies the issues brought up during our industry consultation that are still under review.