Options to address ASIC Compliance Failure

Consider new ways to centrally manage your compliance plans more effectively.

Key findings from ASIC’s review

ASIC examined 50 compliance plans covering 1,471 funds and found that most failed to properly address critical regulatory requirements, including:

  • Design and Distribution Obligations (DDO) – Some plans didn’t even mention DDO, suggesting they hadn’t been updated since 2021.
  • Internal Dispute Resolution (IDR) – Many lacked clear processes for handling investor complaints.
  • Reportable Situations (RS) – Weaknesses were found in how REs track and report compliance breaches.

ASIC Commissioner Alan Kirkland stressed the importance of compliance plans, stating:

These plans set out how responsible entities comply with the law, yet many plans we reviewed failed to adequately set out compliance with important regulatory obligations. Failing to plan is planning to fail. 

It is concerning that some plans even failed to address DDO at all, suggesting they haven't been meaningfully reviewed since 2021.

Alan Kirkland

ASIC Commissioner

Compliance plans ensure that REs meet their legal obligations under the Corporations Act 2001. When these plans are inadequate, REs may be exposed to unnecessary risks.

Kirkland warned that widespread deficiencies suggest deeper governance issues within the industry, which could trigger regulatory action. 

Potential penalties under the Corporations Act

Failure to maintain an adequate compliance plan is a strict liability offence under Section 601FC(5) of the Corporations Act, carrying penalties of:

  • For companies: Up to $15.65 million (based on current penalty units).
  • For individuals (e.g., directors or compliance officers): Up to $1.565 million and/or imprisonment for up to 5 years.

Additionally, ASIC can take enforcement action for breaches of:

  • DDO requirements (failure to ensure products meet consumer needs).
  • IDR obligations (inadequate complaint handling).
  • Reportable Situations regime (failure to notify ASIC of significant breaches).

How Responsible Entities could address concerns

Consider new ways to centrally manage your compliance plans to more effectively mobilise and oversee all parties as they collaborate consistently, whilst collecting all the necessary compliance records.

Take a holistic approach when revising your DDO practices with a review of your due diligence, TMD disclosure and reporting methods.

We have a range of options to help you comply

  • Manage your compliance plans using Objective Keystone and tap into the benefits of reusing clauses of content and collaborative authoring.
  • Targeted ownership of content, coupled with workflows to drive review and approvals, makes light work of authoring, reviewing and approving your plans, including obtaining attestations and audit-ready records from stakeholders.
  • Objective provides a complete solution for your DDO requirements with the means to quickly and efficiently produce volumes of TMDs alongside the management of data required to remain compliant.
  • Our verification functionality and evidence library bring everything together – your substantiation records, version histories, final documents, datasets, reports, and attestations.
  • And with Objective Connect you can share your files with internal or external parties, confident in the knowledge that your information is secure and protected.

But why stop there?

We’ve enabled a wide range of organisations to produce and govern their suites of regulated documents and reports. Achieve compliance, mitigate breaches and reputational damage. 

Find out how Objective can help you stay compliant and mitigate risk and fines. Get in touch.