Australian govt consults on new obligations for ASIC and APRA regarding info sharing

Maria Nikolova

The Govt proposes a statutory obligation on the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority to cooperate and share information with each other.

The Australian Government has opened a consultation on certain recommendations made by the Royal Commission.

Recommendation 6.9 will place a statutory obligation on the Australian Securities and Investment Commission (ASIC) and Australian Prudential Regulation Authority (APRA) to cooperate, share information with each other and notify each other if they have a reasonable belief that there has been a breach of the other’s legislation.

Under the new law, APRA and ASIC are required to cooperate with each other in the performance of their functions and powers, so far as is practicable.

In addition to having the discretion to share information, the two regulatory bodies are required to comply with a request in writing for information from each other unless they formally refuse in writing from the Chair or Chairperson as the case may be.

For example, the types of information that would be included are:

  • audit documents prepared for a company and disclosed to a regulator;
  • information that has been compulsorily collected from a regulated entity;
  • information that has been voluntarily provided to either regulator about the types of financial products a person or company is offering to consumers; and
  • mandatory reports or filings provided by a company to a regulator.

There are exclusions to the information and documents which may be requested. For instance, information or documents that relate to the internal or administrative functions of a regulator are out of scope. This would include material going to the day-to-day operation of an agency, such as leases, procurement or tender agreements, staff employment agreements or contracts for services.

Also out of scope is information or documents that disclose a matter in respect of which the regulator or another person has claimed legal professional privilege.

There are other more specific limitations that exist on the use of certain information that may be shared through the mandatory information sharing scheme. For example, where a party has enlivened their privilege against self-incrimination with one regulator, this would apply to the information or documents in the hand of the next regulator.

There are also a number of protections and limitations on use and disclosure of information that apply under existing Commonwealth legislative provisions or the general law. Some examples of this are:

  • privacy legislation.
  • equitable duties of confidence.
  • whistle-blower protections.

Finally, APRA and ASIC are required to notify each other of material breaches in respect of which the other regulator has enforcement responsibilities.

Interested parties are invited to submit responses to this consultation up until January 24, 2020.

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