The Australian Securities and Investments Commission (ASIC) wields significant compulsory information-gathering powers as part of its role as Australia’s corporate, markets, financial services, and consumer credit regulator. These powers are central to ASIC’s ability to monitor compliance, investigate suspected breaches, and enforce the law across a broad range of sectors, including companies, financial markets and financial services organisations.
Why ASIC Needs These Powers
ASIC’s information-gathering powers are designed to ensure the regulator can obtain the information it needs to make regulatory and enforcement decisions.
How ASIC Uses Its Powers
ASIC’s compulsory information-gathering powers are used in two main contexts: surveillance and investigations.
Surveillance involves gathering and analysing information to test and ensure compliance with the law, often in response to complaints or to proactively examine industry practices.
Investigations, on the other hand, are launched when ASIC suspects a contravention of the law and seeks to gather evidence for potential enforcement action.
Key Information-Gathering Powers
ASIC’s most commonly used powers include:
Requiring the production of documents: ASIC can compel individuals or entities to provide documents relevant to their inquiries. Notices must be in writing and specify the documents required, the time and place for production, and the basis for the request. There are rights to claim legal professional privilege, but otherwise, documents must be produced.
Inspecting documents: ASIC can inspect certain documents without prior written notice, particularly those required to be kept under the Corporations Act. However, this power does not allow ASIC to take possession or make copies without further authority.
Requiring disclosure of information: ASIC can require written responses to questions, again with limited rights to refuse.
Compelling attendance at examinations: In formal investigations, ASIC can require individuals to attend private examinations and answer questions under oath. While legal representation is allowed, and privilege can be claimed, answers must generally be provided.
Compelling reasonable assistance: ASIC can require reasonable assistance in investigations, such as providing passwords or access to secure information.
Applying for search warrants: In certain circumstances, ASIC can apply to a court for search warrants to obtain documents, with execution typically carried out by the Australian Federal Police.
ASIC Notices
An ASIC Notice is a formal and legally binding document issued to individuals or businesses. It intends to compel the recipient to produce documents, provide information or attend interviews as part of investigations into potential breaches of the Corporations Act.
The most commonly received ASIC Notices are:
1. Section 30 Notice - Notice to produce books about affairs of body corporate or registered scheme;
2. Section 33 Notice – Notice to produce documents in a person’s possession;
3. Section 19 Notice – Notice requiring an appearance for an examination; and
4. Section 912(C) Notice – A direction to provide a statement containing information about a financial services licensee or its representative.
Section 30 and 33 Notice
Section 30 and 33 Notices require the production of ‘books’ by a person or company to ASIC. Books are broadly defined in the ASIC Act and can include both electronic and hard copy documents and ‘any record of information.’
Section 19 Notice
A Section 19 Notice requires a person to attend interviews or an examination regarding an ongoing investigation.
Section 912(C) Notice
A Section 912(c) Notice is a written directive issued to financial services licensees or their representatives, requiring them to provide a written statement or documents relating to their business or services, or to demonstrate compliance with the fit and proper person requirement for a licensee.
What to Do If You Receive Notice
Receiving a notice from ASIC does not necessarily mean you are suspected of wrongdoing. This is particularly relevant where you have been provided notice as part of ASIC undertaking surveillance activity.
If you receive an ASIC Notice, it is important that you comply with the request.
Failure to comply with a notice can have serious consequences, including court orders and significant penalties, such as imprisonment or fines.
If you have received a Notice from ASIC and need assistance in responding, please contact the author or Cowell Clarke’s Financial Services Team.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.
