ASIC Breach Reporting for Financial Advisers: Reportable Situations, Deadlines and Reporting Other Advisers
8 min read · facts checked 28 Oct 2026
As at 28 October 2026, an AFS licensee must report each reportable situation to ASIC within 30 days after it first knows, or is reckless about whether, there are reasonable grounds to believe one has arisen (Corporations Act s 912DAA(3)). Reportable situations include significant breaches of core obligations, investigations that run for more than 60 days, gross negligence and serious fraud. Licensees must also report certain misconduct by other licensees' financial advisers (s 912DAB). ASIC's guidance is RG 78, which is on the exam's reading list, and the exam's learning outcomes include identifying breaches of Chapter 7 and the notification duties that follow (Exam preparation guidance v6.0).
What is a reportable situation?
| Type | What it covers | Law |
|---|---|---|
| Significant breach | The licensee or a representative has breached a core obligation and the breach is significant | s 912D(1)(a) |
| Likely significant breach | The licensee or a representative can no longer comply with a core obligation, and the breach, if it happens, will be significant | s 912D(1)(b) |
| Investigation over 60 days | An investigation into whether there is a significant breach or likely breach that continues for more than 60 days, and its outcome if it finds none | s 912D(1)(c)–(d), with "30 days" replaced by "60 days" by ASIC Instrument 2024/620 s 6A |
| Gross negligence or serious fraud | Gross negligence in providing a financial service, or serious fraud, by the licensee or a representative. No significance test | s 912D(2) |
Core obligations and "significant"
- Core obligations include the licensee's general obligations in ss 912A and 912B, the duty to comply with the financial services laws so far as it relates to the Corporations Act and ASIC Act provisions listed in s 761A, and representatives' obligations under those provisions (s 912D(3)).
- Deemed significant (s 912D(4)): an offence punishable by at least 12 months' imprisonment (3 months if dishonesty is involved); a contravention of a civil penalty provision, other than ones excluded by regulation; misleading or deceptive conduct about a financial product or service (s 1041H(1) or ASIC Act s 12DA(1)); or material loss or damage to clients.
- Otherwise, significance depends on the number or frequency of similar breaches, the impact on the licensee's ability to provide its services, and how far the breach shows its compliance arrangements are inadequate (s 912D(5)).
- ASIC relief treats some minor breaches as not significant if every condition is met: for example, a single situation, or a group of similar ones, affecting no more than 10 people, with total loss of A$1,000 or less, rectified within 60 days (ASIC Instrument 2024/620 s 6; RG 78.38).
The deadlines
| Duty | Deadline | Law |
|---|---|---|
| Report a reportable situation to ASIC, in the prescribed form | Within 30 days after the licensee first knows, or is reckless about whether, there are reasonable grounds to believe it has arisen | s 912DAA(2)–(3) |
| An investigation becomes reportable | On day 61; report within 30 days of that day | s 912D(1)(c) as modified; RG 78.48–78.49 |
| Report another licensee's adviser, and give that licensee a copy | Within 30 days after first knowing the circumstances | s 912DAB(3), (5) |
| Notify affected retail clients given personal advice, where recoverable loss is suspected | In writing within 30 days | s 912EA(2) |
| Investigate those clients' losses | Start within 30 days; finish as soon as reasonably practicable | s 912EB(2), (4) |
| Tell each client the outcome of that investigation | In writing within 10 days after it is completed | s 912EB(5) |
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Reporting misconduct by another licensee's adviser
Under s 912DAB, a licensee must report to ASIC if there are reasonable grounds to believe that an individual who gives personal advice to retail clients on relevant financial products, and who acts for another licensee, has been involved in a significant breach or likely breach of a core obligation, or in gross negligence or serious fraud. It must give the other licensee a copy within the same 30 days (s 912DAB(3), (5)). No report is needed if there are reasonable grounds to believe ASIC already knows of the situation and has all the information a report would contain (s 912DAB(4)), which ASIC calls a high threshold (RG 78.80). Licensees need not hunt for other advisers' misconduct, but must not turn a blind eye to facts in front of them (RG 78.73), and a copy given without malice attracts qualified privilege (s 912DAB(6); RG 78.82).
Reporting misconduct as a member of the public
Penalties for not reporting
Failing to report a licensee's own reportable situation under s 912DAA is both a criminal offence and a civil penalty provision. Failing to report another licensee's adviser under s 912DAB is a civil penalty provision only (RG 78.123–78.125). ASIC must also publish information each financial year about the breach reports it receives (s 912DAD).
Worked example
Original example, not an exam question. A compliance review at Kestrel Advice, an AFS licensee, finds that one of its advisers told 40 retail clients that a managed fund's fees were 0.5% a year. They were 1.2%.
- Is it significant? Yes, deemed: it is misleading conduct about a financial product (s 912D(4)(c)), and with 40 clients affected ASIC's relief for minor breaches cannot apply (Instrument 2024/620 s 6).
- When must Kestrel report? Within 30 days after it first knew, or was reckless about whether, there were reasonable grounds to believe the situation had arisen (s 912DAA(3)). If it had needed time to establish the facts, an investigation would only become reportable after 60 days (RG 78.48), but here the review gave it reasonable grounds straight away.
- What do the clients get? If Kestrel suspects they have lost money they can recover from it, it must notify them in writing within 30 days, start investigating their losses within 30 days, and tell each client the outcome within 10 days after finishing (ss 912EA and 912EB).
- Does fixing it end the matter? No. Refunding the fees is remediation; the report to ASIC is a separate duty.
Traps the exam sets
- "We repaid the client, so no report is needed." Remediation does not remove the duty to report (s 912DAA).
- "An investigation must be reported after 30 days." That is the wording of s 912D(1)(c), but since 27 June 2025 ASIC relief makes it more than 60 days (RG 78.48).
- "Reports are due within 10 business days." That was the old regime. The deadline is now 30 days (s 912DAA(3)).
- "Gross negligence needs a significance test." No. Gross negligence and serious fraud are reportable in their own right (s 912D(2)).
- "Only our own advisers' misconduct matters." Section 912DAB can require a report about another licensee's adviser.
Quick check
4 questionsAnswer each one before you tap to see the answer and why. All are from the practice bank.
- 1mediumScenario
Rosa, an authorised representative of Tidewell Advisory, tells 15 retail clients at a seminar that a listed hybrid security is 'capital guaranteed'. It is not. Each of them invests about A$40,000; the hybrid's price has not moved, so none has lost anything. For breach reporting, Rosa's breach is BEST described as…
- A not significant until a client suffers material loss from the statement
- B not significant unless Rosa made the statement knowingly or recklessly
- C not significant if Tidewell corrects it and remediates within 60 days
- D deemed significant: it is misleading conduct about a financial product
Show the answer
Answer: D. deemed significant: it is misleading conduct about a financial product
Answer: Deemed significant: it is misleading conduct about a financial product. A breach of a core obligation constituted by a contravention of s1041H(1) is taken to be significant (s912D(4)(c)), and calling an unguaranteed hybrid 'capital guaranteed' is that conduct.Why not the others:• not significant until a client suffers material loss…: material loss is a separate deeming ground (s912D(4)(d)), not needed here.• not significant unless Rosa made the statement knowingly…: s1041H(1) needs no intention to mislead.• not significant if Tidewell corrects it and remediates within 60 days: the 60-day rectification relief covers no more than 10 clients, and 15 clients are affected.Rule: Under s6 of ASIC Instrument 2024/620 (as amended from 27 June 2025), such a breach is not significant only if one client is affected with no loss, or no more than 10 clients are affected, total loss is A$1,000 or less and it is rectified within 60 days (notional s912D(4A), (4AA); RG 78.38). Otherwise it is reportable within 30 days (s912DAA(3)).Source: Corporations Act 2001 (Cth) ss912D, 912DAA, 1041H (compilation No. 149, 19 Sep 2026); ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2024/620 s6 (compilation No. 2, 12 Sep 2025); ASIC RG 78 Breach reporting (19 Dec 2023, updated 21 Oct 2026)
- 2mediumScenario
Petra, an adviser at Willowbank Advice, switches a client into the wrong fund after ignoring two warnings from the platform, and Willowbank considers this gross negligence. Willowbank refunds the client's A$9,000 loss within a week. Under ss912D and 912DAA, Willowbank … (i) has a reportable situation even if Petra breached no core obligation. (ii) need not report to ASIC, because it has already compensated the client.
- A (i) True, (ii) True
- B (i) True, (ii) False
- C (i) False, (ii) True
- D (i) False, (ii) False
Show the answer
Answer: B. (i) True, (ii) False
Answer: (i) True, (ii) False. Gross negligence is reportable on its own, and refunding the client does not cancel the report.(i) True. Section 912D(2)(a) makes gross negligence by the licensee or a representative in providing a financial service a reportable situation in its own right, so Willowbank does not also need a breach of a core obligation. Petra ignored two platform warnings, and Willowbank itself considers that gross negligence.(ii) False. Section 912DAA requires the licensee to report a reportable situation to ASIC within 30 days after it first knows that, or is reckless about whether, there are reasonable grounds to believe the situation has arisen (s912DAA(3)). Refunding the A$9,000 within a week is good remediation, but remediation and reporting are separate duties.Rule: Gross negligence and serious fraud are reportable situations under s912D(2) without any significance test, and the 30-day reporting duty applies whatever remediation has been done.Source: Corporations Act 2001 (Cth) ss912D, 912DAA (compilation No. 149, 19 Sep 2026)
- 3mediumScenario
On 10 August, Halcyon Advice finds reasonable grounds to believe that its adviser's significant breach of s961B caused 12 retail clients losses they can legally recover from Halcyon. It reports to ASIC on 20 August. Halcyon must START investigating the clients' losses within…
- A 10 days after it lodges the breach report with ASIC
- B 90 days after the first affected client makes a complaint
- C 12 months after the breach in question first occurred
- D 30 days after it first knows these facts
Show the answer
Answer: D. 30 days after it first knows these facts
Answer: 30 days after it first knows these facts. Section 912EB(2) requires Halcyon to start the investigation within 30 days after it first knows of (or is reckless about) the circumstances in s912EB(1), which here is 10 August.Why not the others:• 10 days after it lodges the breach report with ASIC: the 10-day period is real but belongs to the outcome notice, not the start.• 90 days after the first affected client makes a complaint: remediation does not wait for complaints.• 12 months after the breach in question first occurred: 12 months has no basis in the section.Rule: The s912EB(1) circumstances are personal advice to retail clients, reasonable grounds to believe there is a significant breach, and reasonable grounds to suspect recoverable loss. Halcyon must also notify the clients within 30 days (s912EA(2)), finish the investigation as soon as reasonably practicable (s912EB(4)) and tell them the outcome within 10 days of finishing (s912EB(5)).Source: Corporations Act 2001 (Cth) ss912EA, 912EB (compilation No. 149, 19 Sep 2026)
- 4mediumScenario
Ashgrove Advice gives retail clients personal advice on superannuation, life insurance and investments. Its complaints policy covers only investment advice, and its breach procedure says reports go to ASIC 'within 10 business days'. On 1 May it finds a significant breach. To comply with the Corporations Act, Ashgrove must … (i) lodge its report with ASIC within 10 business days after 1 May. (ii) extend its IDR procedure to complaints about its superannuation and insurance advice.
- A (i) True, (ii) True
- B (i) True, (ii) False
- C (i) False, (ii) True
- D (i) False, (ii) False
Show the answer
Answer: C. (i) False, (ii) True
Answer: (i) False, (ii) True. Reports are due within 30 days, not 10 business days, and IDR must cover every financial service the licence covers.(i) False. Section 912DAA(3) allows 30 days after the licensee first knows that, or is reckless about whether, there are reasonable grounds to believe a reportable situation has arisen. Reporting sooner is allowed, but 10 business days was the old regime's deadline, not a current requirement.(ii) True. The IDR procedure must cover retail clients' complaints about all the financial services covered by the licence (s912A(2)(a)(ii)), so a policy limited to investment advice falls short for Ashgrove's superannuation and insurance advice.Rule: A reportable situation must be reported within 30 days, and a licensee serving retail clients needs a dispute resolution system with IDR covering all licensed services and AFCA membership (s912A(1)(g), (2)).Source: Corporations Act 2001 (Cth) ss912A, 912DAA (compilation No. 149, 19 Sep 2026)
Our study notes cover reportable situations and conduct, breach reporting and complaints. The licensee liability guide covers who pays a client's loss. Our free financial adviser practice exam is a timed mock of 20 original questions in 30 minutes across all three areas, mostly on client scenarios. You can try 5 questions with no sign-up, each marked with a worked answer; the full timed mock needs a free account.
Sources (checked 28 Oct 2026)
- Corporations Act 2001 (Cth), ss 912D–912EB (Compilation No. 149, 19 September 2026)
- ASIC RG 78 Breach reporting by AFS licensees and credit licensees (December 2023, updated 21 October 2026)
- ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2024/620, ss 5–7 (compilation from 12 September 2025)
- ASIC: ASIC gives further relief for licensees under the reportable situations regime (Instrument 2025/289, 2025)
- ASIC: Report misconduct
- ASIC: Financial adviser exam: Exam preparation guidance, version 6.0 (September 2026)
Adviser Exam Prep is an independent study aid for candidates sitting the financial adviser exam. It is not affiliated with, endorsed by or connected to the Australian Securities and Investments Commission (ASIC), the exam's administrator or any AFS licensee. "ASIC" is used only to describe the exam. All questions are original practice material, not past or live exam questions, and nothing on this site is financial advice.
Frequently asked questions
How long does a licensee have to report a breach to ASIC?
30 days after it first knows, or is reckless about whether, there are reasonable grounds to believe a reportable situation has arisen (Corporations Act s 912DAA(3), as at 28 October 2026).
When does an investigation become reportable to ASIC?
When it has run for more than 60 days. Section 912D(1)(c) says 30 days, but ASIC Instrument 2024/620 s 6A has replaced that with 60 days since 27 June 2025 (RG 78.48).
Do licensees have to report another adviser's misconduct to ASIC?
Yes, if there are reasonable grounds to believe another licensee's adviser who gives personal advice to retail clients was involved in a significant breach of a core obligation, gross negligence or serious fraud, unless ASIC is reasonably believed to know already. The report is due within 30 days, with a copy to the other licensee (s 912DAB).
More guides
- Section 917B Explained: When a Licensee Is Liable for Its Representative's Advice
- ASIC RG 175 Explained: Conduct and Disclosure Rules for Financial Advisers
- The FASEA Code of Ethics for Financial Advisers: All 12 Standards Explained for the Exam
- Financial Adviser Exam Reading List and Learning Outcomes (ASIC Guidance v6.0)
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