ASIC will continue its focus on the compliance obligations of small businesses, having dealt with over 700 offences relating to failure to keep books and records last year.
The corporate regulator has announced that it will continue its small business focus for the 2018–19 financial year, as part of its small business strategy 2017–2020.
ASIC will continue to review lenders’ compliance with small business protections in unfair contract terms legislation and will aim to offer broader support to small business by providing information, tools and resources.
In addition to ensuring companies comply with their obligations to small business, ASIC will be focusing on compliance by small business, in particular, illegal phoenix behaviour, non-compliance with financial reporting obligations and director misconduct.
Its work with small businesses last year resulted in the successful prosecution of 382 entities and individuals for 734 offences relating to failure to keep books and records, which is often an indicator of illegal phoenix activity, according to the corporate regulator.
ASIC also reported 46 director disqualifications for the period from 1 July 2017 to 30 June 2018.
“As Australia’s regulator for companies, financial markets and providers of financial services and consumer credit, ASIC works to help small business succeed as a key driver of the Australian economy,” said ASIC commissioner John Price.
“Small businesses employ half of Australia’s workforce and make up one-fifth of Australia’s gross domestic product so it’s vital that ASIC helps create an environment that develops the small business sector.”
Further, ASIC will also focus on poor culture and professionalism in financial services and credit, particularly in the provision of consumer credit and financial advice, the fair treatment of small business, and the use of consumer data by firms.
ASIC’s announcement comes days after the federal Treasurer Josh Frydenberg slammed the corporate regulator for its failings in capturing and punishing misconduct at large financial services institutions – especially Australia’s banks.
The royal commission’s interim report, released last week, made clear that where institutions’ non-compliance had been found out, they were often met with a weak penalty.
“This interim report also makes clear that while behaviour was poor, misconduct when it was revealed went unpunished, or the consequences did not meet the seriousness of what has been done,” said Mr Frydenberg.
“Too often, entities were treated in ways that would allow them to think that they, not ASIC, not the Parliament, and not the courts, will decide when and how the laws will be obeyed,” he said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.