Welcome to our Regulatory Highlights for August 2026.

ASIC Highlights

 

ASIC seeks orders against various persons related to Royce Capital for alleged misconduct

 

ASIC has sought orders from the Federal Court to restrain Royce Capital Investments Pty Ltd (Royce Capital), Royce (Aust) Real Estate Pty Ltd (RARE), Louie Kortesis and Paul Chiodo (collectively, the Royce AU Persons) from advertising, promoting or accepting money in Australia for Royce Global Investments LP (registered in Cayman Islands), Royce Global Real Estate LP (registered in Cayman Islands) and Royce Private Investments Fund LP (registered in Delaware USA).

ASIC has also sought orders restraining the Royce AU Persons from advertising, promoting or accepting money for financial products generally in Australia.

ASIC alleges that:

• Royce Capital raised $1.536 million from 5 SMSF investors, purportedly for investing in one or more of the above-mentioned Royce overseas funds.
• Royce Capital provided financial services without holding an Australian Financial Services Licence (AFSL).
• ‘Mr Kortesis and Mr Chiodo were involved in Royce Capital’s alleged unlicensed conduct.’
• ‘Royce Capital and/or RARE made misleading or deceptive representations in brochures provided to some investors, including to the effect that investors would receive a guaranteed or fixed return of 13% per annum’.

On 27 August 2026, the proceeding was dismissed for procedural reasons. ASIC filed a new proceeding the next day to seek the same orders.

 

TMX Group completes the acquisition of Cboe Australia

 

ASIC acknowledges the announcement made by TMX Group Limited (TMX) to confirm the completion of its acquisition of Cboe Australia.

TMX, the largest financial market infrastructure group in Canada, operates the Toronto Stock Exchange, TSX Venture Exchange for equities, Montréal Exchange for derivatives, and post-trade services and depository services.

Chi-X Australia commenced its operations in 2011 as an alternative trading venue to the ASX. Cboe Global Markets acquired the business in 2021, after which it became Cboe Australia.

 

ASIC proposes more flexible pre-IPO advertising

 

ASIC has proposed changes to modernise and simplify the pre-lodgement advertising framework for initial public offerings (IPOs).

Under the proposal, companies will be allowed to advertise unquoted securities before lodging a prospectus, provided that they:

• identify the issuer and seller of the securities;
• make a prospectus available by the time the securities are listed;
• clearly explain when and where the prospectus will be available;
• direct investors to the disclosure document as the principal source of information for making an investment decision.

ASIC is seeking feedback on the proposal by 11 September 2026.

 

AFSL of GFA Capital Markets Ltd (GFA) suspended

 

ASIC has suspended the AFSL of GFA, a contracts for difference business, for five months, between 23 July and 18 December 2026, after findings of multiple compliance failures, following an administrative hearing, that GFA:

• failed to ‘properly separate and handle client money into a designated client money account’;
• mixed client money with non-client money;
• breached derivatives transactions reporting obligations;
• failed to ‘establish and maintain adequate systems and controls to comply with financial services laws’;
• failed to maintain adequate financial, technological and human resources;
• was likely to breach its general AFSL obligations.

GFA will need to demonstrate that it has improved its client money, reporting and compliance arrangements before the suspension expires.

 

Stavro D’Amore jailed for dishonest conduct

 

Stavro D’Amore, a former director of Berndale Capital Securities Pty Ltd (Berndale), has received an effective sentence of 3 years and 10 months for dishonesty offences committed between 2017 and 2018. He will serve 23 months in prison. Highlights:

• Berndale operated as an over-the-counter (OTC) derivatives provider which collapsed in December 2018. Former clients remain owed over $8.9 million.
• Mr D’Amore improperly moved $681,496.98 of company funds while knowing that the money was largely derived from retail client deposits.
• He pleaded guilty to 3 rolled-up charges in contravention of the Corporations Act 2001 (Cth), including dishonest use of his position as a director, ‘dishonest conduct in the course of carrying on a financial services business’, and authorisation of a false and misleading statement to be made in a document submitted to ASIC.

Mr D’Amore filed an appeal against his sentence on 19 August 2026.

The judgment can be found here.

 

ASIC’s enforcement achievements in removing rogue actors in 2025 – 2026

 

ASIC has made significant enforcement achievements in the 2025-2026 financial year in addressing misconduct in financial, credit and corporate sectors, ‘with financial services removals and restrictions’ at the highest level in the past 5 years.

Source: ASIC Annual Reports

 

ASIC warns against Yepbit and Yepbit Exchange

 

ASIC has issued a warning against Yepbit and Yepbit Exchange (Yepbit) upon receiving investors’ reports about their inability to withdraw funds. Highlights:

• Yepbit purports to run a global virtual assets and futures trading platform, including Australia.
• According to some investors who made the reports to ASIC, Yepbit claims that its investor funds are frozen ‘while it complies with ASIC audits or regulatory requirements’. These statements are false. ASIC has not taken any action to prevent Yepbit from returning investor funds.
• Yepbit does not hold an AFSL and it is not authorised to provide any financial products or services in Australia. It is not on AUSTRAC’s Virtual Asset Service Provider (VASP) register either.

ASIC has added alerts relating to the following domains to its Investor Alert List:

• yepbit6.com
• ybtaa.com
• yepbit.xyz
• yepbit.net

 

ASIC v Fiducian Investment Management Services Limited (FIMS): $7.3 million penalty

 

FIMS has been ordered by the Supreme Court of NSW to pay a $7.3 million penalty for ‘engaging in conduct liable to mislead the public’ and failing to ‘discharge its duty to act with care and diligence as a responsible entity’ in relation to the Diversified Social Aspirations Fund (Fund). Highlights:

• FIMS established the Fund in response to client demand for a ‘socially responsible’ or ‘ethical investment option’ and adopted a fund-of-funds strategy. The underlying funds held investments in companies that generated revenue from fossil fuels between October 2019 and May 2024.
• There were 6 versions of the Fund’s Product Disclosure Statement (PDS) during the same period, all of which stated to the following effect, without having reasonable grounds to make such statements, as found by the Court.
  • The Fund would invest in companies ‘that aim to be positive for society and for the environment and aim to avoid investments in harmful activities’;
  • Investments in specified harmful industries and activities would be avoided by the Fund;
  • FIMS would regularly monitor the ‘portfolio exposure, operations and performance of the Fund’ (collectively, ESG statements).
• The Court further identified ‘governance and oversight failures’ on the part of FIMS, including its failures to:
  • adequately monitor whether the underlying investments aligned with the ESG statements;
  • review the investment strategies of the underlying funds;
  • change the underlying investments; or
  • amend the investment objectives to align with the actual investments.

Importantly, this was ASIC’s first case against a managed investment scheme operator involving ‘governance, compliance and oversight’ failures relating to ESG claims. It was also ASIC’s first greenwashing-related civil penalty decision relating to a responsible entity’s failure to discharge ‘its duty to act with care and diligence’.

The judgment can be found here.

 

ASIC v Netwealth: First Guardian-related contraventions

 

The Federal Court has declared that Netwealth Superannuation Services Pty Ltd and Netwealth Investments Limited (collectively, Netwealth) failed to:

• ‘obtain and assess sufficient information about’ First Guardian Master Fund (First Guardian);
• adequately inquire into or evaluate the ‘investment risk of First Guardian before or while offering it to members’;
• inform members of the potential liquidity issues with First Guardian.

Before the civil penalty proceedings, ASIC accepted Netwealth’s court-enforceable undertaking requiring the latter to fully compensate the affected members for their invested sums less amounts already withdrawn.

Notably, ASIC did not seek any pecuniary penalty, partly due to the prompt compensation made to affected Netwealth members.

The judgment can be found here.

 

New director ID requirements from 1 July 2027

 

From 1 July 2027, companies will be required to provide director IDs to ASIC through company reporting processes, such as annual reviews and notifications of changes to directors’ details.

Companies and directors are encouraged to check and update their directors’ information held on ASIC registers and the Australian Business Registry Services.

 

ASIC releases RG 217 to assist small business directors

 

ASIC has released RG 217 Duty to prevent insolvent trading, which sets out ASIC’s expectations on directors to meet their obligations to prevent insolvent trading.

The key is to ‘recognise financial difficulties early enough to take appropriate action’.

 

Sustainability reporting educational videos launched

 

ASIC has released a total of 8 training videos on sustainability reporting to help businesses prepare for these new reporting obligations.

 

ASIC plans to be ‘easier to deal with and harder to avoid’

 

ASIC has set out its plan to be ‘easier to deal with and harder to avoid’ in the recently released ASIC Corporate Plan 2026 – 2027.

ASIC Chair Sarah Court emphasised the 3 pillars involved in this strategy when giving a keynote speech at the Committee for Economic Development of Australia:

• More responsiveness
  • Recent launch of the small business directors essential hub;
  • A commitment to cut the thematic review notices by 15%;
  • A fully digitalised company registry system expected to be launched in 2027;
  • Restructure of market access mechanisms.
• Investment in prevention and earlier detection
  • Investment in intelligence strategy ‘to become more proactive and predictive in how we monitor and how we disrupt threats’;
  • More strategic and analytic use of data to achieve earlier detection of red flags;
• ‘setting clearer expectations, taking more rapid and targeted interventions, with stronger consequences’.
  • Focus on ‘poor conduct and ensuring entities are getting the basics right’;
  • Consideration of closing the regulatory gaps in ASIC’s jurisdiction to allow the regulator to ‘provide meaningful oversight of audit firms and their leadership’, rather than individual auditors.

 

ASIC and APRA jointly warn their regulated entities about frontier AI

 

ASIC and APRA hosted 9 roundtables in June and July 2026 with over 600 attendees from the financial ecosystem. They both urged their regulated entities to take action rather than merely gaining awareness of frontier AI-associated risks. The events were also attended by personnel from the Australian Signals Directorate, the Reserve Bank of Australia, Treasury and the Australian Competition and Consumer Commission. The key takeaways include:

• The importance of ‘getting the cyber fundamentals right’ and ‘industry-led collaboration’;
• Board-level consideration of risk appetite, escalation, recovery and communication arrangements;
• Managing ‘dependency and concentration risk’ of over-reliance on third-party service providers;

ASIC Commissioner Simone Constant reminded the Boards and executives that regulated entities must have ‘well-tested plans’, understand their organisations’ vulnerabilities so they can effectively respond ‘when the worst happens’.

Information paper: Resilience at Frontier AI Speed can be found here.

 

AUSTRAC Highlights

 

Cryptolink’s VASP registration suspended for 3 months

 

AUSTRAC has suspended the VASP registration of Cryptolink Pty Ltd (Cryptolink) for 3 months from 9 August 2026, amid the regulator’s concerns about Cryptolink’s AML/CTF compliance work.

• Cryptolink operates a network of 96 cryptocurrency automated teller machines (CATMs) across the country, allowing customers to exchange cash for cryptocurrencies.
• AUSTRAC accepted an enforceable undertaking from Cryptolink in October 2025 upon identification of alleged contravention of the AML/CTF laws, including missing reporting deadlines in relation to threshold transaction reports (TTRs) and weaknesses in its ML/TF risk assessments.
• AUSTRAC issued Cryptolink with a $56,340 infringement notice, which the latter paid.
• This latest suspension relates to the business’s failures to meet the basic reporting obligations, especially the TTRs again.

 

Fintel Alliance revealed coordinated mortgage fraud in the lending sector

 

Fintel Alliance has revealed coordinated mortgage fraud and systemic issues in our lending space after analysing the data from 10 major Australian banks, mostly linked to properties in Sydney.

• Operation Claw identified suspected mortgage fraud ‘involving inflated incomes, misrepresented employment and fabricated or unverifiable business activity used to support loan applications’;
• Offshore or third-party funds were used to settle property transactions and make mortgage repayments;
• Repeated warning signs included ‘falsified or misleading documents and the repeated use of mortgage brokers, accountants and law firms across multiple loan applications’;
• Fintel Alliance has provided the relevant details and documents to law enforcement agencies.

AUSTRAC CEO Brendan Thomas highlighted that the vulnerabilities were across the whole lending sector.

Public and private organisations collaborated throughout Operation Claw, including AUSTRAC, the Australian Taxation Office, NSW Police Force, NSW Crime Commission, Australian Criminal Intelligence Commission, APRA, ASIC and various Australian banks.

 

Showcase of AUSTRAC’s contribution to fighting financial crime

 

AUSTRAC, with the support of all the reporting entities under its regulation, plays a critical role in fighting financial crime. Below are two recent examples.

Multi-million-dollar criminal networks dismantled

 

A Multi-Agency Strike Team (MAST) operation involving personnel from the Australian Federal Police, Australian Border Force, Australian Criminal Intelligence Commission, AUSTRAC, the Australian Taxation Office, NSW Police Force and the NSW Crime Commission dismantled an alleged criminal network involving the ‘importation and distribution of illicit tobacco and vapes’ in Australia.

• The operation targeted alleged trusted insiders who may have used ‘legitimate freight and logistics businesses to move illicit goods through Australia’s supply chains’.
• Authorities arrested 7 people and executed search warrants in New South Wales, Victoria and Queensland.
• Assets seized include cash, gold bullion, luxury watches and handbags, firearms, illicit tobacco and over 280,000 vapes.

AUSTRAC contributed by assigning a senior intelligence officer to the operation and by ‘providing financial intelligence and specialist analysis’, which assisted in the identification of financial relationships, funds tracing and better understanding of the ‘structure and activities of the alleged criminal groups’. In particular, AUSTRAC provided ‘financial summaries, analysis of AUSTRAC holdings and information obtained through the agency’s intelligence-gathering powers’ under the AML/CTF Act 2006.

Operation Teton

 

AUSTRAC identified suspicious financial activities when analysing transaction reports submitted by a payment platform, relating to several NT-based businesses that generated ‘revenue inconsistent with their apparent business model and may be involved in illicit tobacco sales’.

This prompted the Australian Border Force (ABF) and the Northern Territory Police to investigate into the relevant businesses.

• The businesses allegedly generated approximately $9.36 million from selling illicit tobacco and vaping products.
• 11 warrants were executed, with over 5,500 vapes, 16,500 nicotine products, $73,600 cash, digital devices and business records seized.

 

AUSTRAC warns the public against impersonation scams

 

AUSTRAC has issued a warning to the public about cases where scammers impersonated AUSTRAC and its personnel. Scammers tend to use apparently legitimate calls, emails and messages to pressure victims into making urgent payments or sharing personal information.

AUSTRAC CEO Brendan Thomas said that the regulator does not ask any reporting entities to pay in virtual assets or via social media platforms. He urged the public to be cautious when receiving any communication that seems to have come from AUSTRAC, and contact the agency using the contact details on its website.  

 

AUSTRAC issues notices to businesses that may have failed to enrol

 

AUSTRAC has started issuing notices to businesses (including newly regulated Tranche 2 entities) that appear to be providing designated services without AUSTRAC enrolment, requiring them to provide information to the regulator so it can determine whether the businesses are providing any designated services and meeting their AML/CTF obligations.