Thank you, Chair, and members of the Committee, for the opportunity to appear today.

I am joined by Commissioners Alan Kirkland and Kate O’Rourke, CEO Scott Gregson, Executive Director for Markets, Calissa Aldridge, Executive Director for Regulation and Supervision, Peter Soros and Executive Director for Enforcement & Compliance, Chris Savundra. Commissioner Simone Constant is on approved leave.

Since last appearing before this committee, the Government issued a new Statement of Expectations for ASIC. It provides us with a clear mandate to support sustainable economic growth while maintaining important consumer and market integrity protections. We welcome that responsibility. Strong regulation and economic growth go hand in hand: clear rules and fair markets support confidence, investment and innovation.

With this in mind, there are four matters I want to update the committee on.

Private credit

First, one area that continues to demand our close attention is private markets, particularly private credit.

Private credit has grown rapidly in Australia and plays an increasingly important role in providing finance to businesses and supporting economic activity. We recognise that private credit can deliver benefits to investors and borrowers.

Recent developments involving the collapse of the Bathla Group have provided a significant test for parts of the private credit sector. It reinforces why strong governance, effective oversight, clear disclosure and accurate valuations are critical.

ASIC is working closely with administrators tracing $3.4 billion loaned to Bathla across more than 500 companies and 40 lenders. Our preliminary investigations are examining how funds were raised and used, including exposure to retail investors.

We also have active surveillance under way, with poor private credit practices an enforcement priority. We will report on this shortly.

Public markets

Second, I want to turn to Australia’s public markets. Markets are becoming more interconnected and technology-dependent, while the strategic risk environment in which they operate is increasingly complex. We are also seeing structural changes in how companies raise capital and rapid developments in technology and market infrastructure.

This week, we convened our second financial markets innovation roundtable, bringing together more than 30 participants from across the financial system, government and academia. The discussion focused on practical opportunities to improve the efficiency, accessibility and resilience of Australia’s markets.

Australia starts from a strong position, with deep pools of capital, growing debt markets and a superannuation sector worth more than $4 trillion. But we are competing globally for capital. Regulators and industry need to work together to ensure our markets remain attractive, resilient and able to adapt as technology changes how they operate.

ASIC is taking practical steps to support our public markets and strengthen their foundations. This includes initiatives to support greater participation and investment activity, like our Fast Track IPO pathway and proposed changes to sell-side research guidance. It also includes work to ensure regulation keeps pace with technology, such as our updates to the Market Integrity Rules to reflect the increased use of automated trading systems.

Ultimately, some of the changes needed to keep Australia's markets attractive are within ASIC’s control; others will be for industry, market operators or Government. Our focus is on where ASIC can make a practical difference while maintaining important market integrity and investor protections.

KPMG matter

Third, audit practices remain a focus for ASIC. We have several investigations into KPMG underway, including into the alleged misuse of confidential client information, whistleblower victimisation concerns and auditor transparency reporting. This work is a priority and we will pursue any regulatory or enforcement action that may be warranted.

We’re also conducting a surveillance of audit conduct complaints, including potential whistleblower complaints by the big four consulting firms – a report on this will be released shortly.

As I’ve noted before, our current work is limited to individual auditors and individual engagements. This mean firm level scrutiny as well as some conduct being alleged and reported is outside ASIC’s remit and limits what action we can take.

ASIC has advocated for reforms that ensure broader oversight of audit firms and is engaging with Treasury on its consultation. It is ASIC’s view that the framework should enable firm-level oversight, rather than focussing primarily on individual auditors and engagements.

Enforcement

Fourth, I would also like to update the Committee on some significant enforcement matters.

• Harvey Norman and Latitude Finance were ordered to pay $55 million in combined penalties in July for misleading consumers, a record ASIC outcome for misleading conduct relating to financial products and services.
• In August, Fiducian Investment Management Services was ordered to pay $7.3 million for misleading ESG statements and failing investment fund.
• Former director Usman Siddiqui was sentenced in August to six years and six months’ imprisonment, with a non-parole period of three years and three months. He had transferred approximately $1.75 million from Equitable Financial Solutions to his personal and overseas accounts while the company was in serious financial difficulty and clients were waiting for substantial refunds.
• In September, Mr Ian Omar Chester was sentenced to nine years' imprisonment after being convicted of fraud offences involving investor funds. This significant sentence reflects the seriousness of deliberately misusing investors’ money and abusing their trust.

These outcomes demonstrate the importance of ASIC’s work in pursuing serious misconduct and seeking penalties that deliver meaningful deterrence and reinforce accountability.

I look forward to taking your questions.