ASIC Regulatory Activity
ASIC has issued a number of media releases of interest since our previous newsletter, which have been summarised below:
Greenwashing results
Further to our previous article, ASIC referred three cases of potential greenwashing to the Court. We have an update on these cases below:
| Completed cases | Awaiting outcome |
|---|---|
| Vanguard Australia (24-213MR) Vanguard Australia were found to have made misleading statements by the Court as noted in the May 2024 newsletter and the Court has awarded a penalty to be paid of $12.9m. | Active Super (formerly LGSS) (24-121MR) The Court has found that Active Super made misleading statements, however the penalty has not yet been imposed. |
| Mercer Superannuation (Australia) (24-173MR) Mercer were found to have made misleading statements, and the Court awarded a penalty of $11.3m. |
Financial reporting and audit surveillance results (24-240MR)
On 30 October 2024, ASIC published its findings from its financial reporting and audit surveillance for the year ending 30 June 2024.
The report identifies key areas for improvement in annual reporting, highlighting the top nine topics where ASIC raised concerns:
- Operating and financial review (listed companies only)
- Impairment and asset values
- Non-IFRS profit information
- Financial report disclosures
- Revenue recognition
- Share-based payments
- Group accounting
- Tax accounting and
- Lease accounting
ASIC approach to the mandatory sustainability reporting regime (24-247MR)
As discussed in our Update on Sustainability Reporting, certain companies will be required to mandatorily report on climate information in their annual report. Since these requirements are included within the Corporations Act, ASIC will be the relevant regulatory.
ASIC has issued a draft regulatory guide for comment in relation to this regime which sets out key information such as:
- Who must prepare a sustainability report?
- How the regime will interact with existing legal obligations? and
- How ASIC will administer the sustainability reporting requirements, including ASIC’s approach to granting relief from the regime and use of its new directions power?
The comment period ends on 19 December 2024, and we encourage any clients affected by this to review the regulatory guide and make appropriate comments.
Reminder about lodgement requirements (24-250MR)
Certain entities have requirements to lodge financial statements with ASIC under the Corporations Act and over recent years we have seen a number of fines being imposed on entities who have failed to lodge appropriate reports.
On 12 November 2024, ASIC reported that Optix Australasia Pty Ltd, a small foreign-owned entity, paid a $187,800 penalty for failing to lodge its financial reports for the years ending 30 June 2023 and earlier within the specified period under the Corporations Act 2001.
This is a substantial amount, and we encourage all our clients to review the media release and associated infringement notice and ensure that they are up to date with all reporting requirements.
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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.
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