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The regulator has released a report outlining progress in its efforts to better assist, engage and protect small businesses, which included its investigation on unfair contract terms for SME loans.
The Australian Securities and Investments Commission (ASIC) this week released its ASIC and Small Business report, which highlights its commitment to “help small businesses succeed” through its Small Business Strategy.
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Among the initiatives was ASIC’s joint investigation with the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), detailed in its Unfair Contract Terms and Small Business Loans report.
The report found that the big four banks “had not done enough” to bring small business loan contracts in compliance with amendments to Australian Consumer Law in November 2016, which extended consumer protections to small business loan contracts of up to $1 million.
As a result, the big four banks are set to implement changes to ensure their contract terms are compliant with the legislative amendments.
Assist
ASIC’s overview of its SME strategy noted its efforts to assist small businesses through the provision of information designed to better inform the industry by:
- Providing efficient and effective registry services for small businesses
- Developing financial capability information and resources for small business owners and promote an understanding of compliance obligation
- Engaging and assisting fintech businesses through the Innovation Hub
Engage
The report also outlined ASIC’s engagement with small business and government bodies in order to “understand and respond to challenges and opportunities faced by small business”. Such engagement includes:
- Communication with small business stakeholders through ASIC’s Registry function
- Promoting and supporting greater financial capabilities for small business owners, including Indigenous small business owners
- Engagement with the industry and government, including participation in the Phoenix Taskforce
Protect
Further, the report noted ASIC’s work to “level the playing field” and protect small businesses by:
- Conducting surveillance
- Investigating and, where appropriate, taking administrative, civil, criminal or other action
- Contributing to key policy reforms and government initiatives that have an impact on small businesses
Other achievements noted by the regulator in its report included:
- The processing of over 179,000 new business name registrations
- The answering of over 351,000 inquiries over the phone, by email, via social media and through its new web chat function
- Getting over 33,300 views of the ASIC Small Business Hub
Commissioner John Price commented that ASIC “continues to have a strong focus on promoting and acting in the interests of small business, which is ASIC’s largest customer and stakeholder”.
He said: “ASIC’s Small Business Strategy details our vision to focus our efforts and initiatives to help small business[es] succeed as a key driver of the Australian economy; in doing so, contributing to the financial wellbeing of all Australians.”
