Mackay Chapman July 2026 ASIC Update
In this month’s ASIC update:
- ASX ordered to pay $20.5 million over CHESS replacement disclosure
- ASIC intervenes over private credit fund target markets
- Rex found to have breached continuous disclosure obligations
- First criminal charge under creditor-defeating disposition laws
- ASIC calls for stronger superannuation platform oversight
- Car finance providers put on notice over fees and distributor oversight
- ASIC advances work on financial market innovation
- Digital asset licensing relief extended to September 2026
- ASIC consults on exchange-traded derivatives and securities relief
ASX ordered to pay $20.5 million over CHESS replacement disclosure
The Federal Court has ordered ASX Limited to pay a $20.5 million penalty after it admitted that a February 2022 market announcement concerning the CHESS replacement project was misleading.
ASX had told the market that the project was “progressing well”. Approximately six weeks later, it announced there was a strong likelihood of delay. The project was ultimately paused in November 2022, with ASX derecognising approximately $245 million to $255 million in project costs.
The Court emphasised ASX’s position as the operator of critical market infrastructure and its responsibility to set a high standard for accurate and transparent disclosure. ASX was also ordered to contribute $3 million towards ASIC’s costs.
ASIC intervenes over private credit fund target markets
ASIC has issued interim stop orders preventing Stratfund Limited from distributing two products within its Australian Fixed Income Fund to retail investors.
ASIC identified deficiencies in the target market determinations for the Wealthon Vault Development Fund and The People’s Equity Fund. Its concerns included descriptions suggesting the products may be suitable for investors seeking capital preservation, regular income or ready access to their funds, despite features such as minimum investment periods, discretionary withdrawals and uncertain distributions.
ASIC was also concerned that the products were presented as potentially suitable for investors intending to allocate between 25% and 75% of their investable assets.
The orders prevent Stratfund from dealing in interests, issuing disclosure documents or providing general financial product advice recommending the products to retail clients while the orders remain in effect.
Rex found to have breached continuous disclosure obligations
The Supreme Court of New South Wales has found that Regional Express Holdings Limited breached its continuous disclosure obligations in connection with a February 2023 profit forecast.
Rex had announced that it was optimistic the group would record positive operating profits for the 2023 financial year, subject to further external shocks. The Court found that from 14 April 2023, Rex no longer had reasonable grounds to expect that result.
The company did not announce a downgrade until 20 June 2023, when it forecast a $35 million operational loss.
ASIC did not succeed in its misleading conduct claim against Rex, or its directors’ duties case against three former non-executive directors.
Rex’s former executive chair separately admitted contraventions concerning his duties and involvement in the disclosure breach.
First criminal charge under creditor-defeating disposition laws
ASIC has brought its first criminal charge under the creditor-defeating disposition provisions introduced to address illegal phoenix activity.
NSW restaurateur Giuseppe DeFrancesco has been charged in connection with the alleged redirection of proceeds from the sale of Jasa Dining Pty Ltd. ASIC alleges that $935,000 was dishonestly redirected to Mr DeFrancesco and that he later encouraged the company to redirect a further $96,793 while it was insolvent.
Mr DeFrancesco has also been charged with allegedly offering a payment to induce a witness to withhold truthful evidence in a federal proceeding.
The matters are being prosecuted by the Office of the Director of Public Prosecutions (Cth) in the Downing Centre Local Court in NSW.
ASIC calls for stronger superannuation platform oversight
ASIC has published findings from its review of six platform trustees responsible for more than $300 billion in retirement savings.
Report 833 identified weaknesses in the monitoring of advice fee deductions, unusual investment activity, adviser conduct and high-risk superannuation switching. ASIC found that some trustees conducted limited or no checks of advice documents during parts of the review period, despite a high rate of adverse findings when reviews were performed.
Other concerns included inadequate investigation of advice licensees’ business models, insufficient attention to lead-generation practices and limited monitoring of member churn, unusual fund flows, investment concentration and attempts to circumvent fee controls.
ASIC has called on platform trustees to review their systems immediately and has warned that enforcement action may follow where significant non-compliance is identified.
The report makes clear that trustees cannot rely solely on advisers, licensees or platform functionality to protect members. Trustees remain accountable for identifying foreseeable harm and responding to warning signs before retirement savings are placed at risk.
Car finance providers put on notice over fees and distributor oversight
ASIC has released the findings of a review examining more than 350,000 car loans issued by eight providers.
The review identified concerns about lender oversight of brokers and dealerships, significant differences in fees, inconsistent hardship practices and poor outcomes following repossession.
Some loans involved separate establishment fees charged by both the lender and distributor. In one example, a borrower paid more than $9,000 in fees on a loan of approximately $49,000.
ASIC also reviewed a sample of repossessed vehicle loans and found that 90% of affected consumers continued to owe more than half of the original loan amount after their vehicle was sold. In some cases, the remaining debt exceeded the original amount borrowed.
All participating lenders made changes during the review, including improvements to hardship processes, distribution conditions, governance and monitoring.
ASIC advances work on financial market innovation
ASIC has convened financial market and industry leaders to discuss the competitiveness and modernisation of Australia’s capital markets.
The initiative follows the release of Report 835, which considers developments including distributed ledger technology, tokenised assets, artificial intelligence, automated trading, shorter settlement cycles and extended trading hours.
ASIC has identified opportunities to improve operational efficiency, market infrastructure and pathways for testing new financial products.
It has also highlighted potential risks arising from reliance on external technology providers, market concentration, cyber threats, autonomous trading systems and gamified retail investment products.
Digital asset licensing relief extended to September 2026
ASIC has extended its sector-wide no-action position for certain digital asset businesses from 30 June to 30 September 2026.
The position gives affected firms additional time to apply for or vary an Australian financial services licence. ASIC has also expanded the relief to cover businesses operating under, or entering into, authorised representative and intermediary authorisation arrangements.
The extension also applies to firms that may require an Australian market licence or clearing and settlement facility licence, subject to conditions including notifying ASIC of an intention to apply and attending a pre-application meeting.
ASIC consults on exchange-traded derivative and securities relief
ASIC is proposing to remake four legislative instruments due to sunset in September and October 2026.
The instruments concern exchange-traded derivatives with multiple issuers, Australian recognition of securities transferred through New Zealand’s settlement system, transfers of certain foreign securities quoted on the ASX and substantial holding relief for securities lending arrangements.
ASIC considers that the instruments continue to serve a necessary function and has proposed remaking them for a further five years with minor amendments. The practical effect of the relief would remain unchanged.
Submissions closed on 20 July 2026. Market participants relying on the instruments should consider whether the proposed drafting continues to accommodate their activities and whether any operational issues should be raised during consultation.
The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such. It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only. You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.
