Key points
- ASIC recognises that small businesses are often time-poor and resource-stretched – and ASIC is working to ease some of the pressure through our regulatory simplification program.
- This includes by making our guidance and information clearer, simpler and easier to access and improving our registry services for the millions of small businesses who rely on them.
- While climate reporting obligations apply mainly to larger entities, over time they will have some impact on some small businesses and ASIC is working to help businesses prepare.
Introduction
I would like to begin by acknowledging the traditional owners and custodians of the land on which we meet today, the Yugambeh people. I pay my respects to their elders past and present – and extend that respect to Aboriginal and Torres Strait Islander people here today.
Good morning, everyone. It’s lovely to be here. I want to thank the Small Business Association of Australia for inviting me to speak to you.
The small business sector is ASIC’s largest stakeholder group. But that’s not typically what comes to mind when most people think of us. Present company excepted, of course.
That’s probably because, when ASIC is covered in the media, it’s more often about some other aspect of our work – usually enforcement-related and usually involving a large or well-known entity.
But, in fact, one of the key drivers for taking enforcement action is to help ensure a fair playing field and protect small businesses from unfair practices and harmful conduct.
We regularly take regulatory and enforcement action, for example, against financial services and credit providers that engage in misconduct that impacts small business – and we have a dedicated small business enforcement team.
We also have a highly active small business team, who engage with government agencies, industry associations and small business representatives to share insights, improve regulatory coordination, and minimise duplication and unnecessary regulatory burden for small businesses.
In the last financial year, we took part in around 100 small business events and meetings – in every state and territory. This face-to-face engagement is a critical part of ASIC’s small business strategy.
What I want to focus on today, though, is the important work that ASIC does to support the sector through our regulatory guidance and information – and by providing efficient registry services.
In particular, I want to talk about the work we’re doing through our regulatory simplification program to improve those services – for the millions of small businesses who rely on them.
I will also talk about climate reporting. These obligations apply mainly to larger entities. They’re new and still being phased in. But, over time, they will have some impact on some small businesses. So, we’re doing a range of things to help those businesses prepare.
Regulatory simplification
So, first to regulatory simplification. This is a multi-year program that touches on almost every part of our work, including our registry services. But, at its heart, it’s designed to make it easier for our regulated entities to meet their obligations – small businesses very much included.
We understand that small businesses are often time-poor and resource-stretched. Unlike the big corporates, they don’t have legions of support staff to help out. So, it’s often very much a DIY situation – and that means time out of an already busy day. Time that could have been spent doing business.
ASIC wants to give small businesses some of that time back – and that’s one of the things we’re aiming for with our regulatory simplification program.
We’ve broken the program down into four workstreams:
- Improving access to regulatory information
- Reducing complexity in regulatory instruments
- Making it easier to interact with ASIC
- Simplification through law reform.
I’m going to focus on the first and the third: ‘improving access to regulatory information’ and ‘making it easier to interact with ASIC’.
These are the areas that will make the biggest difference to small businesses, day to day. We’ve already made some improvements, with more planned – as I’ll explain.
Improving access to regulatory information
So, to workstream number one: improving access to regulatory information. What have we done so far?
We've redesigned the ASIC website.
We heard that finding the right information could be ‘hit and miss’. So, we gave it an overhaul. We’ve improved the navigation, put in a better search function and removed more than 9,000 pages of duplicated content.
This means users will be able to access the information they need quicker – and can be confident all the relevant information has been surfaced.
The new website features a specific regulatory resources search – a click away from the homepage. Here, users can find all ASIC forms, instruments and regulatory documents in one place. You can filter these by topic and/or type by selecting the advanced search option at the top of the page.
We’ve also got a business basics area, with useful information for small businesses including ‘registering a business name’ and ‘business name requirements for different types of businesses’. You can find that by entering it into the search bar on our homepage.
Of course, being able to find the information you’re looking for is one thing. But if it’s confusing or hard to understand, then the benefits are limited.
So as part of this workstream, we’re also looking at how to make our information simpler and clearer. That’s not just about how it’s written, though that’s obviously important. It’s also about thinking through how the different materials we produce work together.
While all designed to help our regulated populations understand their obligations, we understand that the range of materials available can be a source of confusion in itself.
Users have told us they don’t always feel sure they’re looking at the most relevant information for their purposes – or that they’ve found all the information they need on a topic.
So, we’re working to better structure these materials – and are considering some proposals to take this forward. To help us, we engaged some experts. As part of their work, they reviewed the needs of our different audiences – including small businesses and directors of small companies.
This is an important audience group for us – and one that has distinct needs. We appreciate that it can be difficult for them to find materials that really help them – and it can be equally difficult to find the time to engage with them if they do.
One way we’re working to address their needs is through a regulatory roadmap we’re developing for small-company directors. This will guide users through all the stages of starting and running a company – as well as closing and/or reinstating it.
So that’s some of what we’ve done so far – and some of what’s to come.
Making it easier to interact with ASIC
Turning now to workstream number three: making it easier to interact with ASIC.
I’ll start with some of the pain points we know users are experiencing and that we’re working to address.
To begin with, we’ve got multiple portals, each with their own purpose, access and authentication methods. That’s creating a fragmented experience for users. There are also issues with navigation and usability, system slowness – and difficulties being able to quickly lodge and update information.
There’s a time cost to all of that – and, to my earlier point, that’s time that could be spent doing business.
So, what are we doing about it?
We have a major multi-year program of work underway to improve our business registry related technology and processes. Through that program, which we call RegistryConnect, we are working to stabilise, secure and modernise the ASIC registers.
Importantly, from a user’s perspective, this will enable simpler and more reliable interactions with ASIC. It will also improve the quality and integrity of our registry data.
While these longer-term improvements are being implemented, we’ve been working to ease the pressure through some short-term solutions to some of the most pressing issues.
For example, we’ve started accepting email lodgements in place of any paper forms that can’t be lodged online. We now accept electronic signatures on all ASIC forms. We’ve also cut call waiting times – by expanding our team of customer service officers and investing in new technology.
We’ve upgraded ASIC’s mainframe, which supports our online registry services, to help address that system slowness. We’ve also reduced scheduled downtime for planned maintenance, delivering more reliable access to company searches.
We’ve got a new professional registers search, with a refreshed and modern interface and advanced search functionality across multiple registers. It also incorporates a simple and secure payment process.
In addition to these relative quick fixes, as I mentioned, we have other, more substantial improvements underway in relation to our registry services.
In this next phase of our RegistryConnect program, we’re working to improve online company registration and lodgement services. This will provide a better user experience, allow users to track the status of their interactions with ASIC and make secure digital payments.
We’ll also expand our streamlined digital services to support more professional registrations and licence types. This is part of a broader effort to reduce the number of transaction channels – responding to the issue of fragmentation I mentioned earlier.
Separately, through our new and improved companies register search, it will be easier to access company information – thanks to its enhanced search functionality and improved service availability.
We are also working to improve the integrity of the data held on our registers by strengthening our authentication processes. This will reduce the risk of fraudulent or misleading lodgements and provide greater assurance to users and the public.
Lastly, another key priority will be to link director IDs to the companies register. Over time, this will improve the traceability of director–company relationships and further prevent the use of fraudulent identities.
In doing so, it will provide the public and stakeholders – including small businesses – with greater certainty about who they are dealing with when engaging with directors and corporate entities.
As our work in this area develops, we will continue engaging with our stakeholders in the design of future services. This includes ongoing collaboration through the Registry Business Advisory Group, whose membership includes end users of these services.
We will also continue to engage with Treasury and others, including on policy and law reform to improve registry outcomes.
Climate reporting
Turning now to a different category of law reform – and that’s the new mandatory climate-related financial disclosure requirements, which came into effect just over a year ago.
We’re still some way from this being fully phased in. But are expecting to see the first reports – from the largest of the three cohorts – from around March next year.
These requirements won’t directly apply to any small businesses.
They’ll only apply to large companies that meet two of the three following criteria: revenue of over $50 million, assets of over $25 million and/or companies with more than 100 employees.
However, many small businesses form part of the value chains of larger businesses. That means they may need to engage with climate reporting considerations in the future. Even though they do not have any direct climate reporting obligations.
So, if a small business has a customer or supplier that is a large business or financial institution, they may request further information to help them meet their reporting obligations.
For example, that large business or financial institution may need to report on their energy usage – and may ask for records, such as electricity bills, so they can create a full picture.
ASIC has been developing our capability in this area for a number of years – and we’ve been working with reporting entities to help them prepare. So, it’s been a learning experience for all – and we do appreciate that there are some concerns.
In fact, it’s acknowledged by academia – and was identified in public submissions to the law reform process – that there is a need for capacity-building in this area across the financial system.
So, in that sense, small business is not alone on the learning journey. But, for all the reasons mentioned previously, we recognise that the smaller the business the bigger the relative impact of any additional requirements.
That said, there will be time to prepare – and ASIC will be assisting with that however we can.
For those who want more detail, I would recommend visiting our sustainability reporting for small business page, which, incidentally, you can also find by using the search bar on our homepage. There’s some good information there.
We’re also developing a suite of educational materials in partnership with the University of Technology Sydney and the Australian Accounting Standards Board.
They’re aimed at the smallest reporting cohort as well as SMEs who are required to submit emissions-related information – and they’re focused on the foundational concepts underpinning the sustainability reporting requirements.
These educational materials will help those who are interested to understand, for example, the basics of climate change, what climate-related physical risks and transition risks are, case studies on identifying climate-related opportunities, and an introduction to emissions accounting.
Once these materials are complete, we’ll make them available on our website – and will also be holding a series of roadshows to take people through them.
Conclusion
So, finally, I just want to thank you all for your time. I hope that has been useful. I know we have a Q&A session coming up. So, if there’s anything more you want to know about these topics – or anything else – I’ll be happy to answer your questions.
