ASIC breach reporting relief narrow, underwhelming | Australian Markets

The Australian Securities and Investments Fee (ASIC) has been instructed that its proposed breach reporting exemptions are so slim that they’re unlikely to be truly utilized by financial advice licensees.

ASIC introduced the proposed reportable conditions extra reduction on 18 February suggesting that its transfer would scale back each administration time and prices for licensees.

Nevertheless, the Stockbrokers and Funding Advisers Affiliation (SIAA) has signalled that its members are much less than enthused by ASIC’s proposed modifications.

ASIC has proposed offering reduction from reporting breaches when:

• the breach has been rectified within 30 days from when it first occurred (this contains paying any mandatory remediation), and
• the quantity of impacted customers doesn’t exceed 5, and
• the whole financial loss or injury to all impacted customers ensuing from the breach doesn’t exceed $500 (together with the place the loss has been remediated), and
• the breach isn’t a contravention of the shopper money reporting guidelines and clearing and settlement guidelines.

The SIAA stated its members’ suggestions is that “the proposed exemptions being suggested by ASIC are so narrow that licensees would be unlikely to rely on them”.

“Our members cite a typical reportable situation where an error has been made in website material which is assessed as having no financial impact on consumers. In that case, the proposed relief would not apply and the licensee would be required to report because the website error is generally available to potentially hundreds or thousands of clients,” it stated in response to ASIC.

“This is the type of incident which gives rise to many reports that are of limited benefit due to the minimal impact the breach has on consumers.”

“To be useful, we recommend that the relief be re-worded so that the requirement for the number of impacted consumers to not exceed five be removed. This would reduce the reporting obligation in a more meaningful way for licensees but would not compromise consumers as the breach rectification and financial loss or damage requirements would remain.”