Mackay Chapman February ASIC Update

In this month’s ASIC update:

• Sarah Court appointed as incoming ASIC Chair
• ASIC outlines 2026 enforcement and supervision priorities
• Fund manager jailed six years for insider trading
• Australian Unity fined $7.125m for DDO failures
• ASIC consults on financial reporting instrument remakes
• ASIC cancels, disqualifies or conditions 28 SMSF auditors
• BPS Financial fined $14m over Qoin crypto product
• ASIC secures $40m in refunds after CFD sector review

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Read on for the full scope.

Sarah Court appointed as incoming ASIC Chair

Sarah Court will commence as ASIC Chair on 1 June 2026, succeeding Joe Longo.

Court has played a central role in ASIC’s recent structural and enforcement overhaul as Deputy Chair, driving a more assertive posture across criminal referrals, DDO enforcement and market integrity actions.

Her appointment signals continuity in approach and activity. Industry should expect the current enforcement-led strategy to remain firmly in place, with sustained scrutiny on governance, culture and non-financial risk management.  A formal transition period will run through the first half of 2026.

We have observed a significant increase in number and effectiveness of enforcement actions, and conversion from investigations, across her tenure as deputy chair and this will continue.

ASIC outlines 2026 enforcement and supervision priorities

ASIC has released its Key Issues Outlook for 2026, highlighting systemic risks across superannuation, private markets, digital assets, AI and operational resilience.

Key focus areas include:

• Retail investor exposure to private credit and opaque private market products
• Operational failures by superannuation trustees as $750bn transitions into retirement phase
• High-pressure sales driving super switching into complex investments
• AI-driven misconduct and cyber resilience failures
• Regulatory perimeter risks in digital assets and fintech
• Insurance claims handling failures following extreme weather events
• CHESS replacement implementation risk
• Audit and sustainability reporting quality
• Risk-taking behaviour in banking driven by margin compression

The outlook confirms ASIC’s supervisory lens will extend beyond traditional misconduct into technology governance, operational resilience and emerging market structure risks.

The message is clear: perimeter arbitrage and “business as usual” compliance approaches will attract scrutiny and action.

Fund manager jailed six years for insider trading

Former fund manager Rodney Forrest has been sentenced to six years’ imprisonment for insider trading involving $3 million of Platinum Asset Management shares.

Forrest unlawfully accessed confidential takeover documents, traded ahead of market disclosure, procured others to trade, and leaked information to the media. He personally profited over $300,000.

The matter was finalised within 16 months by ASIC’s specialist insider trading team.

The Court described the conduct as deliberate and premeditated, reinforcing the central purpose of insider trading laws, preserving a level informational playing field.

ASIC has signalled continued acceleration of criminal market misconduct matters.

Australian Unity fined $7.125m for DDO failures

The Federal Court has ordered Australian Unity Funds Management to pay $7.125 million for breaching design and distribution obligations.

The responsible entity issued interests in its Select Income Fund without properly confirming whether investors fell within the product’s target market determination.

Failures included:

• 89 investors not required to complete suitability questionnaires
• 239 applications where questionnaires were not reviewed
• Up to 144 investors providing answers indicating potential ineligibility

The Court criticised compliance oversight and noted a lack of appropriate experience and training in the DDO function.

ASIC reinforced that drafting compliant TMDs is insufficient without active distribution controls and monitoring.

ASIC consults on financial reporting instrument remakes

ASIC is consulting on remaking three financial reporting relief instruments due to sunset on 1 April 2026, while proposing one instrument be allowed to lapse.

The instruments relate to:

• Rounding in financial and directors’ reports
• Electronic lodgement of financial and sustainability reports
• Technical relief for disclosure documents

ASIC also proposes allowing the Offer Information Statements instrument to sunset, citing limited usage.

Submissions close 27 February 2026.

The consultation forms part of ASIC’s broader regulatory simplification agenda.

ASIC cancels, disqualifies or applies conditions to the registration of 28 SMSF auditors

ASIC has taken action against 28 SMSF auditors in the first half of FY25-26.

Actions included:

• 4 disqualifications
• 2 additional conditions imposed
• 22 registration cancellations

Breaches involved failures in independence, audit standards compliance, professional indemnity insurance, annual statement lodgements and practical experience requirements.

ASIC also flagged heightened scrutiny of in-house audits, where firms audit SMSFs whose financial statements they prepared (a practice explicitly restricted under post-2020 independence standards).

With approximately $1 trillion in SMSF assets, ASIC has reiterated that auditor gatekeeping failures will attract enforcement action.

BPS Financial fined $14m over Qoin crypto product

The Federal Court has imposed $14 million in penalties on BPS Financial for unlicensed conduct and misleading representations in relation to its Qoin Wallet crypto product.

The Court previously found BPS:

• Issued and advised on a financial product without holding an AFSL
• Made false representations regarding token usability and approval
• Improperly relied on authorised representative exemptions

In addition to penalties_, BPS is restrained from operating a financial services business without a licence for 10 years. Adverse publicity notices must be published, and false representation prohibitions have been imposed.

The decision reinforces that digital asset products falling within the Corporations Act definition of financial products require full licensing compliance.

ASIC secures $40m in refunds after CFD sector review

ASIC has secured nearly $40 million in refunds to more than 38,000 retail investors following a sector-wide review of 52 CFD issuers.

Findings included widespread DDO non-compliance, breaches of the CFD product intervention order, and over 70 million erroneous OTC derivative reports.

ASIC reports measurable compliance uplift across onboarding, monitoring and reporting practices.

However, with 68% of retail CFD investors losing money in FY2024 (totalling $458m), high-risk derivative products remain an active enforcement priority.

The CFD product intervention order remains in force until May 2027, subject to potential remake.

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The contents of this article and any linked articles do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such. They are designed and intended as general information in summary form, current at publication, for general informational purposes only. You should seek legal or other professional advice concerning any particular legal matters you or your organisation may have.

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