The Australian Securities and Investments Commission (ASIC) says it will take account of compliance “best efforts” when enforcing a suite of reforms including design and distribution obligations that take effect in October amid ongoing COVID-19 disruptions.

The regulator will consider the context firms are operating in, including the scale of the changes being introduced, challenges arising from the current operating environment and that final guidance on two measures will be received by industry relatively close to the start date.

“While these reforms have been in the pipeline for some time, ASIC recognises they require significant changes to businesses’ systems and processes and take effect at the same time industry is facing other challenges, including from COVID-19 and renewed lockdowns,” Chairman Joe Longo said last week.

“We therefore recognise there will be a period of transition as industry finalises implementation of additional compliance measures, and ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply.”

Design and distribution obligations, anti-hawking rules, the deferred sales model for add-on insurance and updated internal dispute resolution requirements are due to commence from October 5. A new breach reporting regime and reference checking reforms will also take effect from the start of the month.

Mr Longo indicated the initial light approach to enforcement will extend to technical or inadvertent breaches, where firms have systems changes underway and act quickly to address problems as they arise.

“However, where firms are not acting in good faith or where we detect conduct causing actual harm, we will not hesitate to enforce the law,” he said.