ASIC reviews suspense and error accounts after observing weak controls

ASIC has begun surveillance of intermediaries’ suspense and error accounts after observing poor practices, according to its October 2026 Market Integrity Update. The review examines governance, operational controls and records, including whether account use is consistent with financial services law.[1]

The accounts have legitimate purposes, but ASIC says weak controls can conceal losses or inappropriate trade allocations. The update does not identify firms or quantify the prevalence of the problems.[1]

A temporary account can leave a lasting blind spot

Suspense accounts can hold trades temporarily while their final allocation is resolved. In an April 2024 industry commentary, MIntegrity’s Amanda Mark described legitimate uses such as orders awaiting allocation across a fund manager’s subaccounts or an overseas client’s accounts. She also identified the risk of using temporary transfers to obscure positions or affect margin calculations.[2]

That earlier analysis explains why the route through an account matters as well as its closing balance. Mark argued for visibility over who moved a position, why it moved and when. A flat balance at the end of the day cannot, on its own, explain how positions were treated earlier in the day.[2]

Consider a position moved into a temporary account and later returned to its original destination. Looking only at the final balance would miss both transfers. A transaction history would preserve them, allowing a reviewer to examine their timing and explanation. This is an illustration of the control problem, not a reported finding about a particular firm.

ASIC plans further enquiries over the coming months, including scrutiny of policies, transaction data and controls, and intends to publish more insights. The October update reports surveillance in progress; it does not announce a new account rule or an enforcement outcome.[1]

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