Funds Update - 31 January 2025

In this Funds Update for 31 January 2025:

1. ASIC releases key issues outlook for 2025
2. Court orders $8 million penalty for DDO breach

ASIC releases key issues outlook for 2025

On 24 January 2025, ASIC identified the most significant current, ongoing and emerging issues within its regulatory remit in 2025, including:

• the changing dynamics between public and private markets;
• superannuation members being let down by their trustee;
• cyber-attacks, data breaches, and internal system failures undermining market confidence and causing financial loss;
• impact of ASX’s CHESS replacement on Australian markets;
• poor quality climate-related financial disclosures leading to misinformed investment decisions; and
• poor audit quality resulting in declining market confidence and misinformed investment decisions.

The ASIC media release is available here.

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Court orders $8 million penalty for DDO breach

On 24 January 2025, the Federal Court of Australia ordered Firstmac Limited to pay a $8 million penalty after it was found to have failed to meet its design and distribution obligations.

In July 2024, the Court found that Firstmac had failed to take reasonable steps that would have resulted in, or would have been reasonably likely to have resulted in, distribution of its investment product to term deposit holders being consistent with its target market determination.

ASIC had sought a penalty of $25 million, whilst Firstmac had argued that $4 to $4.5 million was appropriate.

The full decision is available here, and the ASIC media release concerning the decision is available here.

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