ASIC Notices – practical guidance
The Australian Securities and Investments Commission (ASIC), as the corporate regulator, has extraordinarily wide powers of investigation, particularly in relation to compelling the production of information and documents. ASIC can investigate any suspected contravention of the Corporations Act 2001 (Cth), or any suspected contravention involving the management or affairs of a company.
When discharging its investigation function, ASIC will commonly issue written notices requiring:
- a person to appear before ASIC in order to answer questions under oath or affirmation; and/or
- a person or company to produce certain ‘books’ to ASIC.
We have set out below a summary of these information-gathering powers, together with some practical tips when responding to such notices.
Section 19 notices – appear before ASIC to give evidence under oath or affirmation
Section 19 of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) allows ASIC to issue a notice requiring a person to attend a recorded interview and answer questions under oath or affirmation. This is an exceptionally powerful tool at ASIC’s disposal and is frequently and repetitively utilised. It is crucial to understand your legal obligations and entitlements when you receive such a notice, including:
- a person required to attend an interview is entitled to have a lawyer present;
- the interview is conducted in private and will be recorded. A person interviewed is entitled to a copy of a transcript of the interview;
- it is often necessary for a person being interviewed by ASIC to claim certain privileges before answering questions, such as the privilege against self-incrimination and/or legal professional privilege. This requires the person being interviewed to actually say the word “Privilege” before answering. If the privilege is claimed correctly, any answer given during an interview cannot later be used in evidence against the person being interviewed;
- it is very difficult (although not impossible) to challenge the legal validity of a notice, or object to any question asked by ASIC on the basis of relevance; and
- it is an offence not to comply with a section 19 notice. For this reason, if there are logistical difficulties in attending the interview, we generally engage with ASIC at an early stage to ensure that a person served with a notice does not risk non-compliance (and a potential penalty).
Often, a person attending an interview will not be given the questions that are going to be asked by ASIC beforehand, nor any indication of the matters being investigated by ASIC. Interviewees will sometimes be shown documents and asked questions about those documents. For these reasons, we generally recommend that a lawyer attend with the person being interviewed in order to assist the interviewee in responding to ASIC’s line of questioning. In some instances, the person’s lawyer can ask their own questions during the interview which can assist in clarifying answers which have previously been given.
Section 30 & 33 notices – requiring the production of ‘books’ to ASIC
Another commonly used information-gathering power is for ASIC to issue a notice requiring the production of ‘books’ by a person or company to ASIC. ‘Books’ is widely defined in the ASIC Act to include both electronic and hard copy documents and ‘any record or information’.
Again, this is an exceptionally broad power. Often, these notices require the production to ASIC of very large amounts of documentary information under very short timeframes. In our experience, there are a number of important considerations which should be kept in mind if a person or company receives such a notice, such as:
- it is generally best to engage with ASIC at a very early stage to confirm timeframes for production of documents and any potential narrowing of the scope of documents required to be produced in response to the notice. This can significantly reduce the cost and work required to respond to a notice;
- as with section 19 notices (dealt with above), legal professional privilege can and should be claimed. Importantly, ASIC does not accept blanket claims for legal professional privilege and there is a specific procedure for asserting and proving such a claim;
- it may be necessary to engage third party forensic information technology providers to assist in document review and production (including with respect to making a claim for legal professional privilege). This is particularly the case where large tranches of email correspondence are produced; and
- ASIC has strict requirements for how electronic documents are produced in response to notices. If these requirements are not followed, ASIC may allege that the notice has not been properly complied with and seek to enforce compliance with the notice by further action (or a further notice).
Relying on its powers of compulsory production, ASIC may require the production of physical electronic storage devices on the basis that the physical devices themselves are ‘documents’ within the meaning of term in the Acts Interpretations Act 1901 (Cth). This is consistent with ASIC’s broad powers of investigation, the objects of the ASIC Act and the desire of ASIC to gather all relevant information (in whatever format or medium) for the purposes of its investigations. When ASIC’s powers of production are exercised in this manner, exceptional care should be taken, particularly in relation to maintaining legal professional privilege over documents which would otherwise fall within the scope of a notice issued by ASIC.
Section 19(2)(a) – provide ‘all reasonable assistance’ to ASIC
Section 19(2)(a) of the ASIC Act also enables ASIC to issue a notice requiring a person or company to provide ‘all reasonable assistance’ to ASIC in relation to an ongoing investigation. As with section 19 and section 30/33 notices, ASIC’s powers in this regard are very broad. To that end, we have observed the ‘reasonable assistance’ power relied upon by ASIC to require a person to:
- not disclose the existence of an investigation to certain persons;
- require recipients to answer very specific, direct questions about the affairs of a company;
- provide passwords and login details for any documents produced to ASIC; and
- require that a person preserve, and not delete, documentary records.
These types of notices should be carefully construed and treated with the same level of caution as other types of notices issued by ASIC.
The information-gathering powers of ASIC are largely unparalleled. In many respects, ASIC’s powers are analogous to, or exceed, the powers of Courts to require a person to provide evidence in an ongoing proceeding. In addition to the matters identified above, ASIC also has the power to issue search warrants (sometimes referred to as ‘dawn raids’) and conduct surveillance of individuals.
If you have received one of the above notices, care should always be taken in reviewing and responding to the notice, at all times adopting a firm but cooperative approach.
 Section 19, Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).
 Section 30 and 33, ASIC Act.
 Section 23, ASIC Act.
 Section 24, ASIC Act.
 Section 68, ASIC Act.
 Section 63, ASIC Act.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.