If you have received a notice from the Australian Securities and Investments Commission (ASIC), or if you believe you may be under investigation, it is important to understand what ASIC can and cannot do, and what your rights are at every stage.

ASIC is a well-resourced federal regulator with broad powers to investigate suspected contraventions of the Corporations Act 2001 (Cth) and the ASIC Act 2001 (Cth). Those powers include compelling the production of documents, requiring attendance at examinations, and executing search warrants.

This guide explains the main investigation powers ASIC uses, what receiving a notice means for you, and what you should do.

ASIC’s investigation powers — an overview

ASIC has four main compulsory information-gathering powers:

  • Power to require production of documents — ASIC can compel you to produce documents by issuing a written notice.
  • Power to inspect documents — ASIC can inspect documents you are required to keep under the Corporations Act without issuing a prior notice.
  • Power to require disclosure of information — ASIC can require you to answer questions in writing.
  • Power to require attendance at an examination — ASIC can compel you to attend a private examination and answer questions on oath.

ASIC can only use these powers in defined circumstances: to perform its regulatory functions, to ensure compliance with the law, in relation to a suspected contravention, or for the purposes of a formal investigation.

Receiving a notice to produce documents

If ASIC requires you to produce documents, it must issue you with a written notice. The notice will describe the documents sought, the time and place for production, and the general basis for the requirement. The time given for production must be reasonable in the circumstances.

The notice may also request electronic data and files, and ASIC officers may assist with the production of electronic material.

Your rights and obligations when served with a production notice:

  • You must produce the documents specified, even if doing so may tend to incriminate you or expose you to a penalty.
  • You are entitled to refuse to produce documents that are covered by legal professional privilege. If you claim privilege, you must be able to explain the basis for the claim.
  • ASIC may inspect and copy the documents and retain them for as long as necessary, including for the duration of any court proceedings.
  • ASIC must provide you with access to the documents while they are in its possession.

Receiving a notice to produce documents does not necessarily mean you are a suspect. ASIC may issue notices to a range of individuals and entities in the course of an investigation. For example, in an insider trading investigation, notices may be issued to the person whose trades are under scrutiny, their broker, people alleged to have passed on inside information, the ASX, and relevant banks.

ASIC’s power to inspect documents

Separately from its power to require production, ASIC can inspect certain documents that must be kept under the Corporations Act — such as financial records. Unlike a production notice, an inspection does not require a written notice and ASIC is not required to give you advance warning.

However, the right to inspect does not entitle ASIC to take possession of the documents or make copies. If ASIC wants copies, it must either request them voluntarily or issue a production notice.

ASIC’s power to require disclosure of information

ASIC can also require you to provide information in writing by answering questions. This power is most commonly used during surveillance, preliminary inquiries before a formal investigation begins, or when monitoring compliance with an enforceable undertaking.

The same rules apply as for document production — you must provide the information even if it may incriminate you, but you can claim legal professional privilege if it applies.

Section 19 examinations — compulsory examinations

One of ASIC’s most significant powers is the ability to compel you to attend a private examination and answer questions under oath or affirmation. These are commonly referred to as section 19 examinations after the relevant provision of the ASIC Act.

ASIC can only use this power if it suspects or believes (on reasonable grounds) that you have information relevant to a formal investigation it is conducting or intends to conduct.

To compel your attendance, ASIC must issue a written notice stating the general nature of the matter being investigated. The notice must be served a reasonable time before the examination date to allow you to seek legal advice.

What happens at a section 19 examination:

  • The examination is conducted in private. No one other than you, your lawyer, and ASIC staff may be present unless ASIC gives permission.
  • You are entitled to be represented by a lawyer. It is strongly recommended that you have a lawyer present.
  • You must answer all questions asked of you. You cannot refuse to answer on the basis that the answer may incriminate you (see below on how incriminating answers are treated).
  • You can refuse to answer questions if the answer would disclose information covered by legal professional privilege, but you must explain the basis for the claim.
  • A record of the examination may be made. You are entitled to request that a record be made, and you are entitled to a copy of any transcript prepared.

What about self-incrimination?

You cannot refuse to answer a question in a section 19 examination on the ground that the answer might incriminate you. However, there is an important protection: if you claim privilege against self-incrimination and the answer does include incriminating information, that information cannot be used against you in a criminal prosecution or pecuniary penalty proceedings. It can, however, be used in perjury proceedings if you give false evidence.

What if you cannot attend?

It is an offence to fail to attend a section 19 examination without a reasonable excuse. If you receive a notice and cannot attend, you must contact the ASIC officer named in the notice immediately and seek legal advice. Illness with a medical certificate may be accepted as a reasonable excuse. Inconvenience or business pressure generally will not be.

Search warrants

ASIC can apply to a court for a warrant to search premises for books and records. Search warrants are a measure of last resort, used when there is a risk that documents may be lost or destroyed.

ASIC cannot apply for warrants to intercept telecommunications in transit. That power belongs to the AFP.

What happens if you do not comply

Failing to comply with an ASIC notice is a serious matter. If ASIC believes you do not have a good reason for non-compliance, it can raise the matter in court and seek an order for compliance.

The penalties for non-compliance are significant:

  • Intentionally or recklessly failing to comply with a notice (without reasonable excuse): up to two years’ imprisonment.
  • Providing false or misleading information: up to five years’ imprisonment.

If you receive a notice and have difficulty complying, contact ASIC and your lawyer immediately. Provided you are acting in good faith, ASIC will generally work with you to facilitate compliance.

What should you do if you receive an ASIC notice?

The most important thing is to seek legal advice before taking any steps. An experienced criminal defence lawyer can help you to:

  • Understand exactly what is required of you under the notice
  • Identify any documents or information that may be covered by legal professional privilege
  • Prepare for and attend a section 19 examination
  • Ensure you do not inadvertently give ASIC more than it is entitled to

Angus Cameron and Partners has extensive experience acting for individuals and companies in ASIC investigations. We provide urgent and confidential advice. If you have received an ASIC notice, contact us as soon as possible.

Frequently asked questions

Does receiving an ASIC notice mean I am being investigated for an offence?

Not necessarily. ASIC may issue notices to people who have relevant information without suspecting them of any wrongdoing. However, you should take any ASIC notice seriously and seek legal advice regardless of whether you believe yourself to be a suspect.

Can I have a lawyer present at a section 19 examination?

Yes. You are entitled to have a lawyer present at a section 19 examination and it is strongly recommended that you do. Your lawyer can advise you during the examination and ensure that ASIC does not exceed its lawful authority.

Do I have to answer questions that might incriminate me?

Yes — you cannot refuse to answer questions in a section 19 examination on the ground of self-incrimination. However, if you make a claim of privilege against self-incrimination, any incriminating information you provide cannot be used against you in a criminal prosecution or penalty proceedings, other than in perjury proceedings if you give false evidence.

Can I claim legal professional privilege over documents or information?

Yes. Legal professional privilege protects confidential communications between you and your lawyer made for the dominant purpose of obtaining legal advice or for use in anticipated litigation. If you claim privilege, you must be prepared to explain the basis for the claim. ASIC may challenge it.

What if I cannot find some of the documents ASIC has requested?

You must make genuine efforts to locate and produce the documents specified in a notice. If you cannot find documents that should exist, or if documents have been destroyed in the ordinary course of business, contact your lawyer and contact ASIC to explain the position.

Is the section 19 examination recorded?

ASIC may make a record of the examination and must do so if you request it. If a transcript is prepared, you are entitled to a copy. You may be asked to sign a copy of the examination transcript once it is provided to you.

Can I talk to other people about what happened at my examination?

Generally, no — not while the investigation is ongoing. You will usually be subject to a confidentiality obligation that prevents you from discussing the content of the examination with anyone other than your lawyer. You should comply with this obligation carefully.

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