ASIC says crypto and climate regulation is coming

“We’re very focused on administering the regulatory framework around superannuation jointly with APRA,” he said.

“We’re very interested in making the system work for all Australians.”

In the address on Tuesday, Mr Longo said the corporate watchdog was zeroing in on sustainable finance claims to ensure Australia is able to continue attracting more than $4.1 trillion in foreign investment “to help power our industry, fund our services and create jobs.”

“As more and more Australian firms release financial reports and disclose climate risks, we need to speak the same language as our global peers,” Mr Longo said, referring to the new International Sustainability Standards Board rules that are likely to be made mandatory in Australia over coming years.

He said the work being done by ASIC commissioners to define standards was urgent, given the country’s need to continue attracting capital.

“All that other work has real implications on capital raising, capital allocation in the economy,” he said.

But Mr Longo flagged disclosure obligations would likely be made mandatory over a period of years, “not the next 18 months” and would be nuanced according to the company’s ability to respond.

“It cannot be one size fits all. We have very large institutions that are well-resourced and have been working on these issues for some time and participating in the standard-settings,” he said.

The regulator has also moved to active supervision and enforcement after developing obligations for marketing appropriate products to investors.

And as the government weighs tightening regulation of the buy now, pay later sector, Mr Longo said ASIC is reviewing product governance arrangements in the small amount credit sector.

“We’re looking at how target market determinations were developed, including the data, metrics and other key considerations that underpinned these important public documents,” Mr Longo said.

Mr Longo said investors do not fully understand the significant risks inherent in crypto investments, lured in by slick marketing and the promise of high returns.

“It’s going to be very hard to regulate,” Mr Longo said.

“To my mind, this is a highly risky, highly volatile activity and you should be really careful before you [invest in] it.”

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