Journal

Posted April 17, 2020

Posted By Meghann Cannon

IMPORTANT: Regulatory Updates

Published 24 March, 2020

Prepared by Rebecca Exley

In the last week, there has been a flurry of financial and regulatory measures in response to the economic risk of COVID-19. We know that many of you are getting your heads around these in order to advise your clients on how they should proceed with the financial situation they find themselves in.

Some changes that are relevant for your financial services company

Proposed 1 July changes

APRA has issued guidance that it “has suspended the majority of its planned policy and supervision initiatives”. 

ASIC has also stated that it is “committed to working constructively and pragmatically with the firms we regulate; mindful they may encounter difficulties in complying with their regulatory obligations due to the impact of COVID-19”. 

ASIC has immediately suspended a number of near-term activities which are not time-critical. These include consultation, regulatory reports and reviews, such as the ASIC report on executive remuneration, updated internal dispute resolution guidance and a consultation paper on managed discretionary accounts. Stakeholders will shortly be notified of deferred consultation and publications relevant to them. 

We expect is likely that planned legislative changes introducing annual opt-in, annual consents and FDS changes may also be postponed. We will keep you posted about this.

AGM’s

For relevant listed and unlisted public companies who have 31 December 2019 balance dates and are due to hold their AGM’s by 31 May 2020 ASIC has announced guidance on their AGM and reporting requirements. 

As of March 20, ASIC has confirmed that it will take “no action” if AGM’s are postponed for a period of two months (until end of July 2020), and will support the use of AGM’s which utilise appropriate technology. 

However, ASIC has advised that companies wishing to hold hybrid or virtual AGM’s will need to check whether their own Constitution permits them. There is also some doubt as to whether the Corporations Act permits the use of virtual AGM’s and the legal status of any resolutions passed at a virtual AGM. 

Companies should be aware that a “no action” letter from ASIC does not prevent third parties from taking legal action in relation to the same conduct.

Above all, ASIC has urged caution against holding AGM’s in person which may breach the restrictions on large gatherings. 

This situation will remain under review and could be subject to a further extension if required. 

Financial Reporting Obligations

ASIC is closely monitoring developments that may affect financial reporting. At present, there does not appear to be any widespread indications that companies will be unable to meet their full-year and half-year financial reporting obligations at 31 December. 

For companies who have 31 March or 30 June balance dates, ASIC will monitor the market conditions and Covid-19 and will issue further guidance as needed. Report this

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