Beyond Compliance: Fortifying Your Register Against Modern Share-market Fraud

As a leader in Australia’s corporate landscape, share registries are custodians of our investors' assets and trust. However, the environment in which we operate is undergoing a hostile evolution. Share-market fraud, driven by sophisticated and industrial-scale criminal syndicates, is accelerating at a pace that demands a fundamental shift in our approach to security, from a reactive posture to a proactive, ecosystem-wide defence. 

The threat is no longer limited to simple phishing scams. We are witnessing a new breed of fraud that exploits every technical and legislative gap with calculated precision. An investor alert issued by ASIC on 15 October 2024 highlighted the increased threat of stolen shares due to identity theft. These criminals are now so brazen they even manipulate the very institutions designed for protection. The Stockbrokers and Investment Advisers Association (SIAA) has noted tactics where scammers who have successfully taken over a victim's account will pre-emptively lodge a complaint with the Australian Financial Complaints Authority (AFCA) to create a facade of credibility. 

This level of sophistication requires a response that is more connected, more intelligent, and more agile. It is a challenge that no single organisation can meet alone. 

Our commitment: a united front against fraud 

At Automic Group, we believe the only way to outpace this threat is through a truly joined-up ecosystem. We are committed to fostering this collaboration, working in lockstep with regulators, peers, and technology specialists to create a formidable barrier to criminal activity. 

This commitment is already in action. We are exchanging real-time threat intelligence with ASIC and AUSTRAC, ensuring that insights gained from one part of the market benefit the whole. Internally, we are continuously hardening our defences by: 

• Strengthening multi-factor verification: Making it more difficult for unauthorised actors to gain access to accounts. 

• Deploying advanced analytics: Using data-driven insights to detect and flag suspicious activity before it can cause harm. 

• Embedding security-first design: Ensuring that every platform, workflow, and process we build has security at its core, not as an afterthought. 

These measures provide a robust defence, but we know that some of the greatest vulnerabilities lie in the quality and currency of the data itself. This brings me to a critical, and often overlooked, component of modern fraud prevention. 

The shareholder reunification service: more than just compliance 

In September 2023, amendments to the Corporations Act allowed companies to qualify for relief from sending notices and documents to members whose contact details are no longer current, known as a ‘lost member'. While this offers administrative relief, these uncontactable accounts can represent a significant security risk, creating dormant assets that are prime targets for fraudsters. 

To address this, Automic has introduced a comprehensive Shareholder Reunification Service. While this service ensures our clients can satisfy their new obligations under the Act, its strategic value extends far beyond compliance. It is a powerful tool for fraud reduction and good corporate governance. 

By proactively locating and re-engaging with lost shareholders, we are not just cleaning a database; we are actively shrinking the attack surface available to criminals. A current, engaged, and contactable shareholder is the first and best line of defence for their own assets. 

Our service achieves this by: 

• Partnering with trusted asset recovery experts to conduct thorough searches. 

• Scanning eligible databases to identify potential new contact details. 

• Engaging with CHESS Participants to update records across the market. 

• Conducting targeted outreach programmes via email and other established contact points. 

Reuniting investors with their assets is not only the right thing to do, but it also demonstrates sound corporate citizenship, a cornerstone of any effective Environmental, Social, and Governance (ESG) framework. It enhances shareholder goodwill, solidifies investor relations, and sends a clear message that you are a diligent and responsible custodian of your shareholders' interests. 

Proactively using our service helps close a key vulnerability, ensures you meet your legal obligations, and reduces ongoing administrative costs associated investor communications. 

The way forward 

The fight against financial crime is a permanent fixture of our market. By embracing a holistic security strategy that combines technological defences, ecosystem collaboration, and a commitment to good governance, we can protect the integrity of our market and the assets of the investors we all serve. This proactive stance moves beyond simple compliance to build genuine resilience, ensuring your company is not just protected, but is also perceived as a leader in corporate responsibility. 

For more information on how our Shareholder Reunification Service can enhance your security posture and compliance framework, please do not hesitate to contact me or your Customer Success Manager at Automic.