Australia: Regulatory Trends 2019 - Australia

Last Updated: 7 October 2019
Article by Avryl Lattin and Dean Carrigan

Introduction

BUILD RESILIENCE – MANAGE RISK – INCIDENT RESPONSE

The fast pace of regulatory change in Australia continues in 2019. This report sets out a summary of the key regulatory trends that are confronting our clients across our key sectors of insurance, energy, trade, transport and infrastructure.

By international standards, Australia is one of the most regulated economies in the world. This year's publication is designed to provide you with an overview of the most pressing regulatory issues that businesses operating in Australia need to be aware of, and to provide practical advice as to what businesses should be doing to manage these issues. Given the release of the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry this edition includes a special feature on the regulation of fi nancial services industries. Also profi led are a number of developments affecting the regulation of international trade and transport, including the emerging drone regulatory regime.

Clyde & Co is committed to ensuring that our clients are in the best position possible to respond to any regulatory issues that do arise. The consequences of failing to prepare include civil and criminal penalties, reputational damage and in the most extreme cases, loss of authority to operate a business. Our regulatory and investigations team focus on these issues and are able to help organisations build resilience through practical advice that deals with these complex regulatory challenges.

CORPORATIONS LAW

WHAT ARE THE EMERGING ISSUES?

  • Tougher penalty framework
  • Revised ASX Governance Principles
  • Climate change disclosure

NEW PENALTY FRAMEWORK FOR CORPORATIONS LAW

From 13 March 2019, companies that engage in corporate misconduct are now exposed to significantly increased financial penalties.

The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) (Penalties Act) received Royal Assent on 12 March 2019. The Penalties Act is designed to deal with the long-held concern that penalties for breaches of corporations law are insufficient to deter misconduct. This issue was squarely raised in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Financial Services Royal Commission).

To deter future misconduct, the Penalties Act has increased civil and criminal penalties for breaches of the Australian Securities and Investments Commission (ASIC) administered legislation including the Corporations Act 2001 (Cth) (Corporations Act), Australian Securities and Investments Commission Act 2001 (Cth), National Consumer Protection Act 2009 (Cth) and the Insurance Contracts Act 1984 (Cth) (Insurance Contracts Act).

The Penalties Act increases financial penalties and terms of imprisonment. Those involved in corporate misconduct face a greater risk of increased financial exposure for such wrongdoing.

Civil penalties increased up to a cap of AUD 525 million for corporations. Criminal penalties are further set out in the Corporate Crime Regulatory Update (see page 20).

Breaches of general Australian Financial Service Licence (AFSL) obligations by a company under section 912A of the Corporations Act will now attract a financial penalty.

Under the Penalties Act the penalty will be the greater of:

  • AUD 10.5 million;
  • three times the value of the benefit derived from the contravention; and
  • 10% of the company's annual turnover, capped at AUD 525 million.

The Courts have also been provided with greater discretion to provide compensation to victims and a relinquishment regime has been introduced to ensure any financial benefit gained as a result of the misconduct is disgorged.

REVISED ASX CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS

The ASX Corporate Governance Council (the Council) released the fourth edition of its Corporate Governance Principles and Recommendations on 27 February 2019.

In the revised principles, there is a significant focus on organisational culture and a number of new board responsibilities are designed to focus on corporate culture and governance. Principle 3 has been substantially revised to require that a listed entity "...continually reinforce a culture across the organisation of acting lawfully, ethically and responsibly".

In terms of new policies, the recommendations suggest that every listed entity should have a whistleblower policy and an anti-bribery and corruption policy. There is also a focus on risk management in the revised principles. This includes ensuring that the company has risk strategies to deal with contemporary and emerging risks such as conduct risk, digital disruption, cyber-security, privacy, data protection, climate change and sustainability.

Under Rule 4.10.3 of the ASX Listing Rules, ASX listed entities are required to include in their disclosures a benchmark of their corporate governance practices against the Council's recommendations. If an entity's practices do not conform, then, in accordance with the "if not, why not" approach, they must disclose that fact and specify the reasons for the departure.

DISCLOSURE OF CLIMATE CHANGE RISKS

There have been a number of developments in recent years which have put pressure on companies to consider climate change risks and make appropriate disclosures in their annual reports.

Australian shareholders have been taking a more active approach to pushing for disclosure of climate change risk by Australian listed companies by proposing shareholder resolutions on the topic at Annual General Meetings and have gone as far as launching legal proceedings against companies for failure to adequately disclose climate change risk in Annual Reports. In 2018, ASIC publicly stated that its key priorities in relation to climate change risks are corporate governance and disclosure, with ASIC Commissioner John Price highlighting that corporate governance practices for managing risks and opportunities should apply to climate change risks in a similar manner as these practices already apply to compliance risks, cyber security or digital disruption.

The voluntary disclosure framework developed by the Taskforce on ClimateRelated Financial Disclosures (TFCD) in June 2017 may help companies in considering how to disclose climate change related risks in a way which will take into account the general information needs of investors outside of the strict legal requirements for disclosure.

To view the full article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions