Acclime’s corporate snapshot – December 2022.

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ASIC’s focus areas for end-of-year reporting

In preparing company financial reports, directors, report writers and auditors should be focused on providing “useful and meaningful information,” according to ASIC Commissioner Sean Hughes.

“Directors and preparers should assess the impact on asset values and provisions, and disclose uncertainties, key assumptions, business strategies and risks,” he said.

Among a laundry-list of considerations that ASIC wants to see addressed, there is notable focus upon uncertainties. Factors such as staff availability, interest rates, energy prices, geopolitical risks and COVID conditions reflect the headlines we’ve all been living with over the past 12 months.

You can read the Commissioner’s full comments here.

Material business risks also in the spotlight

A 30 November ASIC media release drew attention to risk disclosure in annual reports, giving examples of five listed entities which ASIC surveillance had detected were not fully disclosing material risks. In each case, the deficiency in reporting was traced to the Operating and Financial Review (OFR) of the directors’ report.

The OFR must contain information that shareholders would reasonably require to make an informed assessment of the entity’s operations, financial position and business strategies, and future prospects.

Commissioner Hughes emphasised “the importance of a high-quality OFR,” which, he said “helps to inform the decision-making of investors by disclosing material risks…”

New ASIC consultation proposes remaking class orders

Also announced on 30 November, ASIC’s proposal seeks to remake nine class orders relating to takeovers, compulsory acquisitions and relevant interests. The regulator points out that the orders are working effectively and that they sit well within the wider legislative framework.

ASIC’s Consultation Paper 365 seeks to forestall the ‘sunsetting’ of the orders, as part of a wider Treasury and ASIC review. No changes are proposed to any of the orders, although submissions are invited, and can be made up to 23 January next year.

CHESS replacement project grinds to a halt

The ASX announced on 17 November that the troubled ASX CHESS Replacement Project will be put on hold and industry testing will be cancelled, while the replacement initiative is reassessed.

The pause appears to be a response to the recent independent review undertaken by Accenture, and also in the context of ASIC and the RBA’s joint letter of regulatory expectations.

In a separate media release, ASIC described the developments as a “significant setback to the replacement of critical national infrastructure for Australia’s cash equity markets…”

The issue is now part of a Parliamentary Joint Committee enquiry.

ASIC’s top-10 ways to spot a crypto scam

Do you think you’ve got a pretty good nose for snake oil? In support of Scams Awareness Week, ASIC has released a list of key signs to look out for in relation to crypto scams.

ASIC’s Deputy Chair Sarah Court said Australians lost more than $701M to investment scams in 2021, a rise of 135% from the previous year. And the rise was mostly fuelled by – you guessed it – crypto scams.

See if you can pick the ten tell-tale signs of a scam, then check your answers here.

Acclime’s corporate snapshot – December 2022
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