Regulatory Highlights: July 2026

Welcome to our Regulatory Highlights for July 2026.

 

ASIC Highlights

 

ASIC issues DDO stop orders against various funds

 

ASIC has issued interim DDO stop orders against Wealthon Vault Development Fund and the People’s Equity Fund operated by Stratfund Limited (Stratfund) due to concerns that the Target Market Determinations (TMDs) inappropriately indicated that the target market includes retail investors with:

• investment goals not supported by the product design.
• an intention to invest and hold the product as their core component (25 – 75%).
• an investment horizon of more than 3 years, when the product has a minimum of 4-year investment term (Wealthon Vault Development Fund only).
• regular withdrawal needs.

ASIC revoked the interim stop orders on 20 July 2026 without issuing any final stop orders after Stratfund amended the TMDs. The amendments reduced the intended investment allocation to 25% of investable assets, removed references to the products being suitable for investors seeking income distributions (and capital preservation in the case of the People’s Equity Fund), and aligned the investment timeframe and withdrawal terms with the relevant product disclosure statements.

 

ASIC cancels Trive’s AFSL

 

ASIC has cancelled the Australian Financial Services Licence (AFSL) of Trive Financial Services Australia Pty Ltd (Trive), effective from 1 July 2026, as it was no longer carrying on a financial services business.

Trive operated a Contracts for Difference (CFDs) business, which was among ASIC’s industry-wide review of the sector. Trive agreed to stop taking on new customers in April 2025, after ASIC identified various serious deficiencies in its processes.

 

ASIC v ASX: $20.5 million penalty for misleading conduct

 

The Federal Court has ordered ASX Limited (ASX) to pay a pecuniary penalty of $20.5 million for making a misleading statement that the CHESS replacement project was ‘progressing well’ on 10 February 2022, even though the project had been marked as “red”, was not on its critical path to Go-Live in April 2023 and had to “return to” the critical path (among other things).

Justice Markovic, in agreeing with the $20.5 million pecuniary penalty jointly proposed by the parties, considered the French factors, the course of conduct principle, the parity principle and the totality principle. ASX was also ordered to pay $3 million towards ASIC’s costs.

Her Honour emphasised the necessity for the whole market to understand that ‘misleading announcements made by disclosing entities about their operations will be the subject of significant penalties and there is a need to deter other listed entities from making misleading announcements about the progress of significant projects in which they may be engaging, including where the completion of the project involves third parties’ (Judgment [98]).

The judgment can be found here.

 

KPMG hearing: ASIC Chair’s opening remarks at the Parliamentary Joint Committee on Corporations and Financial Services, Ethics and Accountability – KPMG hearing

 

ASIC Chair Sarah Court made remarks at the hearing about the ongoing investigations into KPMG. Importantly:

• The relationship of trust between auditors and those being audited is critical in safeguarding the integrity of our financial system.
• ASIC has very limited jurisdiction over audit firms and calls for an extension of the Corporations Act to cover big partnerships, and a significant increase in the penalties for regulatory breaches.
• The current whistleblower protections are insufficient, and ASIC calls for their extension to cover disclosures made in relation to the conduct of partnerships.
• While legal professional privilege is a fundamental right of the parties, ASIC challenges it regularly, but the processes are resource-intensive and detract from the regulator’s other work and significantly contribute to delays in the investigation processes.

 

Deutsche Bank: $2 million penalty over systemic trade reporting failures

 

ASIC issued an infringement notice to Deutsche Bank upon identification of the latter’s breaches of its over-the-counter (OTC) derivative transactions reporting obligations, by misreporting more than 260,000 OTC transactions.

ASIC has reasonable grounds to believe that Deutsche Bank failed to take all reasonable steps to accurately report the ‘direction’ fields for large volumes of reports relating to foreign exchange and commodities OTC transactions, for 208 business days. The regulator considered these to be systemic deficiencies.

The direction fields are mandatory reportable data and provide information on whether a reporting entity is acting as the effective buyer or seller of a transaction at a specific price. Accurate reporting helps enhance regulators’ capacity to oversee and monitor systemic risks, detect and prevent potential market abuse.

Deutsche Bank has cooperated with ASIC throughout the investigation, paid the infringement notice and is working on the prevention of future reporting issues.

Deutsche Bank, by complying with the infringement notice, is not taken to have admitted any guilt or liability, and is not taken to have contravened the ASIC Rules.

 

WealthHub’s $1 million for reporting failures

 

The Markets Disciplinary Panel (MDP) has issued an infringement notice of $1.055 million to WealthHub Securities Limited (WealthHub), an online broker owned by National Australia Bank (NAB), for its failures to accurately report regulatory data over 9.5 million times over a decade.

The MDP, following an ASIC investigation, found that between July 2014 and October 2024, WealthHub repeatedly provided incorrect Intermediary IDs or failed to provide the information completely in orders and trade reports submitted to the market operators. As a result, WealthHub failed to provide complete and accurate regulatory data and failed to have or maintain the necessary organisational and technical resources to comply with its reporting obligations.  

The Intermediary ID is the AFSL number of the entity responsible for order placements and trades through a market participant’s systems, which helps ASIC in its surveillance efforts.

The MDP was concerned that WealthHub did not have the capacity to identify or remediate breaches in a timely and effective manner, missed multiple opportunities to resolve the root causes, failed to take adequate corrective action and did not lodge a reportable situation report to ASIC until January 2023.

WealthHub has paid the fine and complied with the infringement notice. Compliance with an infringement notice cannot be taken as an admission of guilt or liability, and WealthHub is not taken to have contravened s 798H(1) of the Corporations Act.

 

AFSL of Australian Fiduciaries Limited (Fiduciaries) cancelled

 

ASIC has cancelled Fiduciaries (in liquidation)’s AFSL after a payment by the Compensation Scheme of Last Resort (CSLR):

• 30 January 2026: The Australian Financial Complaints Authority (AFCA) made a determination against Fiduciaries, which the latter has failed to pay.
• 12 June 2026: The CSLR paid $150,000 for the AFCA determination and notified ASIC.
• 2 July 2026: ASIC cancelled Fiduciaries’ AFSL, which is not subject to merits review.

ASIC must cancel a licensee’s AFSL if the latter fails to pay an AFCA determination, and the CSLR subsequently pays compensation.

AFCA has advised ASIC that it will only consider complaints within the scope of the Compensation Scheme of Last Resort as Fiduciaries is now in liquidation.

ASIC’s investigation into Fiduciaries and its related entities continues.

 

Warnings: Pump and dump scams involving fake celebrity endorsements

 

ASIC has warned the public against pump and dump scams involving fake celebrity endorsements and impersonation of financial institutions. The common patterns are:

• A consumer sees an investment advertisement on social media that uses the image of a public commentator, well-known investor or financial institution, which is actually fake.
• The consumer clicks the post and gets directed to a messaging platform.
• A scammer then impersonates an expert or their ‘assistant’ to provide stock recommendations.
• Other scammers pose as investors in the group to talk about the profits they have made by following the stock recommendations.
• Consumers buy the recommended shares, leading to an artificial increase in the share price.
• Scammers may ask for screenshots as proof of the purchase of the shares.
• The scammers sell their own holdings at the inflated price, causing the share price to drop while leaving the consumers to bear the significant losses.

 

Registration of financial adviser Peter Morrison-Dowd cancelled

 

The Financial Services and Credit Panel (FSCP) has ordered the cancellation of the registration of financial adviser Peter Morrison-Dowd, effective from 10 July 2026, which also prohibits him from registering with a relevant provider until after 13 September 2027, or providing personal advice to retail clients on relevant financial products during the same period.

The FSCP is responsible for administrative matters upon receiving ASIC’s referrals relating to financial advisers’ conduct. The individual sitting panels comprise one ASIC staff member and at least two FSCP members.

The FSCP formed a reasonable belief that Mr Morrison-Dowd contravened the best interests duty, the appropriate advice obligations and the timing of giving a statement of advice (SOA) requirements relating to 3 clients. He also contravened the obligation to provide a SOA relating to 2 clients.

The FSCP panel found that Mr Morrison-Dowd engaged in the following types of misconduct in relation to either 2 or 3 clients:

• Failed to follow an appropriate best interests advice process, including the failure to identify the clients’ objectives, financial situation and needs, and the failure to assess suitable alternatives.
• Made inappropriate recommendations to clients, including allocating a significant portion of a low-balance SMSF to a high-risk or illiquid product, and recommending products that were inconsistent with the client’s risk profile and asset allocation.
• Made false and misleading statements when making personal advice, including ‘target returns and guaranteed outcomes without an adequate factual basis’.
• Failed to comply with the Code of Ethics.

 

ASIC secured $830 million in civil penalty orders and gave $644 million back to Australians in 2025-2026

 

The 2025 – 2026 financial year marks one of the strongest enforcement periods on ASIC’s record. Highlights:

• $830 million in civil penalties.
• $12 million in infringement notices and $137,315 in criminal fines.
• $643.5 million to be returned to investors and customers through remediation, refunds and payments relating to ASIC’s work.
• More than 250 investigations launched.
• 25 criminal convictions.
• 32 new civil proceedings filed and 18 new criminal prosecutions commenced.

ASIC Chair Sarah Court emphasised the regulator’s focus on ‘misconduct that causes real harm’ and on returning funds to Australians, by ‘pursuing cases that expose serious failures in systems, governance and conduct’.

 

The best interests duty in the context of mortgage broking

 

ASIC Commissioner Alan Kirkland spoke at the Mortgage and Finance Association of Australia Conference in Melbourne on 22 July 2026, focusing on the best interests duty.

Home lending is the largest market for consumer credit in Australia, with 81% of new residential mortgages arranged by brokers.

Mr Kirkland described what it looks like for mortgage brokers to do their work well in relation to the best interests duty, including:

• Recommending loans that ‘work for your customers’ circumstances and priorities. With features that they want or need. At an appropriate price, given the other offers available on the market.’
• Documenting and explaining the reasons for your recommendations to the customers to help them make informed decisions. The documented reasons shall make sense in light of a specific customer’s circumstances, rather than relying on boilerplate factors.
• Recording steps taken to educate customers about the available options.

Mr Kirkland emphasised that brokers cannot merely act as a customer’s mouthpiece when they know a product is not right for the customer or where there is a better deal.

ASIC is conducting a review of the mortgage broking sector, which will be completed later this year. While there are relatively few AFCA complaints relating to this sector, complaint volumes are not the only indicator of consumer harm. Internal dispute resolution (IDR) acts as an early warning system for potential compliance deficiencies. RG 271 on IDR are enforceable.

Mr Kirkland also reminded AFS licensees of their obligations to report suspected misconduct by another licensee or representative.

 

Brendan Gunn sentenced in relation to suspected cryptocurrency scams

 

Brendan Gunn has been sentenced to 12 months’ imprisonment, with immediate release ‘upon entering into a recognisance of $3,000 requiring he be of good behaviour for 12 months’, in the Local Court of NSW for dealing with over $180,000 when it was reasonable to suspect that the funds were proceeds of crime, derived from overseas cryptocurrency investment scam targeting Australians, in contravention of s 400.9(1) of the Criminal Code (Cth).

From December 2018, Mr Gunn became a director of Mormarkets Pty Ltd, trading as Coinshype, which accepted deposits domestically for virtual assets and other purported investments.

Between January 2019 and May 2020, 22 bank accounts with 6 banks were opened under Mormarkets’ name. Mr Gunn was alerted by banks on various occasions that the funds sent to the Mormarkets accounts had been affected by fraud or other suspicious activities. All accounts were subsequently closed by the banks.

Upon the closure of 2 accounts, Mr Gunn received 2 bank cheques for $180,000, including proceeds of investment sums of $181,000, which he sent to an associate. Mr Gunn pleaded guilty to dealing with these funds, which were reasonably suspected of being the proceeds of crime, in January 2026.

ASIC Chair Sarah Court commented that Mr Gunn ignored complaints made to Mormarkets’ banks and ‘helped suspected international scammers move money from Australians’.

 

Harvey Norman and Latitude – $55 million for misleading customers

 

The Federal Court imposed $35 million penalties against Harvey Norman Holdings Ltd and $20 million against Latitude Finance Australia for misleading conduct and false and misleading representations made in a national campaign to promote a 60-month interest-free and no-deposit payment method for goods purchased at Harvey Norman stores:

• The advertisements were promoted in newspapers, on radio and on television countrywide between January 2020 and August 2021 and would have been accessed by millions of Australians.
• The advertisements failed to clearly point out the requirements on the consumers to obtain a credit card from Latitude to purchase goods, to pay establishment fees (till 15 March 2021) and monthly account service fees.

The judgment can be found here.

 

Mortgage offset failures

 

ASIC has put banks on notice that they need to clean up their act in managing offset accounts.

ASIC has released Report 837 Offsets, out of mind: Banks fall short on mortgage offset account promises.

• This targeted review concerned the practices of 8 banks in the setup, linking and management of mortgage offset accounts between September 2023 and August 2025, including how the banks identified and responded to offset-account-related failures.
• The banks were AMP Bank Limited, Australia and New Zealand Banking Group, Commonwealth Bank of Australia, Credit Union Australia Ltd, HSBC Bank Australia Limited, ING Bank (Australia) Limited, Macquarie Group Ltd and Westpac Banking Corporation.
• Top types of offset account failures include offset account opened but not linked (55%), offset account not opened (22%) and offset account linked outside of timeframes communicated to customers (14%).
• Banks have paid over $55 million in customer compensation for offset account failures.

ASIC Chair Sarah Court highlighted 4 concerns when she spoke at the Mortgage Offset Press Conference:

• The banks had trouble readily identifying whether or when their customers had requested an offset account, and had to resort to manual searches at times.
• Some banks had difficulties in identifying offset account failures, and relied on customer complaints or the processes of responding to ASIC’s data requests to identify the issues.
• Some banks were slow to fix issues and failed to compensate customers.
• Some customers have no way of finding out whether or not their offset account has been set up as requested, is linked to the right home loan, or is saving them interest.

Ms Court emphasised that ASIC expects all banks to identify and promptly compensate customers affected by the offset account failures. ASIC will continue to monitor the handling of the issues and will take further action, where appropriate.

ASIC urged borrowers to check whether their mortgage offset accounts are indeed working.

 

NTA changes for responsible entities

 

ASIC has announced an increase in the minimum net tangible assets (NTA) thresholds applicable to responsible entities, operators of investor directed portfolio services (IDPS) and corporate directors of retail corporate collective investment vehicles (CCIVs) to reflect inflation between June 2013 and March 2026 and introduce annual indexation going forward. The changes will commence on 1 July 2027.

 

Larry Dawson: permanent director’s disqualification

 

The Federal Court of Australia has permanently disqualified Larry Dawson of NSW from managing corporations upon ‘findings that he had breached his directors’ duties’.

• Mr Dawson was the sole director of PW Kitt Co Pty Ltd (now deregistered) between 2019 and 2020.
• Mr Dawson set up company bank accounts, facilitated transfers to cryptocurrency accounts that allowed dissipation of investor funds, and failed to oversee the company’s activities and benefited from the activities himself.
• Mr Dawson’s conduct allowed the company to be used as a vehicle to defraud $7 million in superannuation funds from Australians.

 

ASIC v Auditeo etc – First Guardian audit failures

 

ASIC has brought actions against Auditeo Australia Pty Ltd (Auditeo) and 2 auditors, Ajm Didarul Islam Khan and Brian Robert Taylor, in relation to the alleged serious audit failures in connection with the First Guardian Master Fund.

ASIC alleges that the audit opinions were issued without a reasonable basis and without performing significant audit work in accordance with the auditing and assurance standards. The alleged failures include:

• Auditeo’s audit files do not substantiate that the 2021 financial year audit was actually conducted.
• It failed to test approximately $137 million and $170 million of reported assets in the 2022 and 2023 financial years, respectively.
• Auditeo and Mr Taylor considered the wrong compliance plan applicable to part of the 2022 financial year and the entire 2023 financial year.

ASIC Chair Sarah Court highlighted that liquidators were appointed for First Guardian only 6 months after Auditeo’s unqualified audit reports, exposing over 6,000 Australians to the collapse, and the losses could be as high as $446 million.

The Originating Process can be found here.

The Concise Statement can be found here.

 

AUSTRAC Highlights

 

AUSTRAC finalises enforceable undertaking with Sportsbet

 

AUSTRAC has completed its enforceable undertaking with Sportsbet Pty Ltd (Sportsbet), after the latter dealt with significant deficiencies in its AML/CTF controls. AUSTRAC accepted Sportsbet’s undertaking in May 2024, in the process of reviewing the corporate bookmaker sector.

AUSTRAC CEO Brendan Thomas reminded reporting entities to ‘take immediate and sustained action’ to comply with their legal obligations.

 

AUSTRAC accepts bet365’s enforceable undertaking

 

Hillside (Australia New Media) Pty Limited, trading as bet365, entered into a binding enforceable undertaking on 6 July 2026. History of the matter:

• 10 August 2022: AUSTRAC issued a letter to bet365 outlining its concerns about the latter’s AML/CTF framework, after carrying out a compliance assessment of bet365’s framework. The same letter also stated that the AUSTRAC CEO was considering requiring it to engage an external auditor.
• 2 November 2022: A delegate of the AUSTRAC CEO issued a notice to bet365, requiring it to appoint an external auditor to carry out an audit. This was done.
• 15 September 2023: bet365 provided the External Audit Report for the period 1 July 2020 to 2 November 2022 to AUSTRAC.
• May 2024: bet365 confirmed its intention to commission an independent review to provide assurance on remediation works.
• 7 February 2025: bet365 provided the Independent Review Report to AUSTRAC.
• The External Audit Report and Independent Review Report (Reports) confirmed AUSTRAC’s concerns that ‘bet365 failed to comply, and may continue to remain non-compliant, with provisions of the AML/CTF Act in force at the time of review, being’ ss 81 (failure to adopt an AML/CTF Program within the meaning of s 83) and 36 (failure to carry out ongoing customer due diligence for some customers).

bet365 provided the enforceable undertaking to address AUSTRAC’s concerns and ensure that it ‘does not contravene the AML/CTF Act or the AML/CTF Rules, or is unlikely to contravene the AML/CTF Act or the AML/CTF Rules, in the future’. The Remedial Action Plan is attached to the Enforceable Undertaking.  

The Enforceable Undertaking can be found here.

 

AUSTRAC CEO’s speech at the AFIA Risk Summit

 

The AUSTRAC CEO, Brendan Thomas, spoke at the AFIA Risk Summit. Highlights:

• The reporting of SMRs increased by almost 12% this year compared to last year in the non-bank lending sector.
• The number of reporting entities lodging SMRs increased by more than 20%.
• Major challenges:
  • Organised money laundering networks are moving money in and out of Australia and across different payment channels.
  • Many of these networks have global footprints, supported by ‘encrypted communication platforms, professional accountants and technology specialists’.
  • The volume of illicit money in the Australian economy is dramatically increasing, with two major drivers being drugs and illicit tobacco.
  • Insider-enabled fraud – Former employees, contractors, and individuals with inside knowledge are helping criminals bypass controls.
  • AI is accelerating the speed and scale of financial crime, including synthetic identities, AI-generated identity documents, automated movement of virtual currencies and AI-driven fraud operations.
• AUSTRAC is adopting AI and large language models to detect patterns at scale, identify emerging typologies, analyse SMRs and provide more prompt feedback to the reporting entities and referrals to law enforcement.
• Fintel Alliance has made major contributions, including:
  • Uncovering widespread mortgage fraud in the banking sector.
  • Identifying micro money laundering networks.
  • Helping locate and extradite a Vietnamese fugitive.
  • Identifying paedophiles in Australia and overseas and working with law enforcement to catch them.
• AUSTRAC is currently exploring how to expand Fintel Alliance to include more non-bank lenders and tranche 2 entities.