In this Funds Update for 28 June 2024:
- ASIC appeals decision that authorised representatives can act as issuers of a financial product.
- ASIC appeals decision granting relief from civil penalty liability.
- Treasury opens consultation on electronic execution and online meetings.
- ASIC suspends AFSL for failing to lodge annual reports.
ASIC appeals decision that authorised representatives can act as issuers of a financial product
On 18 June 2024, ASIC lodged a notice of appeal of the Federal Court’s decision in ASIC v BPS Financial [2024] FCA 457. In the decision, the Federal Court held that an authorised representative of the holder of an Australian financial services licence (AFSL) could, in that capacity, be the issuer of a financial product. The decision conflicted with ASIC’s views on the use of the authorised representative exemption in relation to issuing financial products, as expressed in RG 36 and INFO 251. We reported on the decision in a previous Funds Update.
ASIC has updated its previous media release about the decision to refer to the appeal. ASIC’s notice of appeal can be downloaded from the updated media release, available here.
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ASIC appeals decision granting relief from civil penalty liability
On 18 June 2024, ASIC announced it had appealed the Federal Court’s recent decision that a cryptocurrency product provider should be relieved of liability for a civil pecuniary penalty order under section 1317S of the Corporations Act 2001 (Cth) (the Act).
We reported on the decision in our most recent Funds Update. In the decision, the Federal Court held that while the provider had breached the Act, the provider should be granted relief from the civil penalty under section 1317S because it had acted honestly in considering whether its product required an AFSL and had made a genuine attempt to comply with the Act including by obtaining legal advice from a large law firm which did not identify any risk of breaching the law.
ASIC’s notice of appeal can be downloaded from its media release, available here.
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Treasury opens consultation on electronic execution and online meetings
On 24 June 2024, Treasury announced it had opened a consultation seeking feedback on the effectiveness of amendments made to the Act in 2021 and 2022, allowing companies and registered schemes to hold online meetings, electronically execute documents and transmit meeting-related documents electronically.
In particular, the consultation is interested in the effects of the amendments on participation by and exercise of voting rights of members, and the flexibility and costs of holding meetings and executing documents.
The consultation has asked for submissions by 19 July 2024.
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ASIC suspends AFSL for failing to lodge annual reports
On 28 June 2024, ASIC announced that it had suspended an AFSL for three months due to the holder’s failure to lodge its annual financial statement, auditor’s report and audit opinion for the 2023 financial year.
This follows ASIC’s announcement of a focus area of 30 June 2024 financial reporting and audit surveillance, as reported in a previous funds update.
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Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.