This is a service specifically targeted at the needs of busy non-executive directors (NEDs). We aim to give you a ‘heads-up’ on the things that matter for NEDs in the week ahead – all in a few minutes.
In this edition, we discuss the release of exposure draft legislation seeking to enhance beneficial ownership disclosures, the enforcement priorities for the Australian Securities and Investments Commission (ASIC) in 2025, and proceedings commenced by ASIC against National Australia Bank (NAB) for alleged failings towards customers facing financial hardship. We also examine the reasons of the Takeovers Panel’s decision to decline to conduct proceedings on a review application in relation to the affairs of AIMS Property Securities Fund (ASX: APW) (APW).
In Over the Horizon, we discuss the Federal Government’s plans to introduce a ‘digital duty of care’ requiring digital platforms to undertake regular risk assessments against enduring harms associated with their services.
Regulation
Treasury consults on exposure draft legislation to enhance beneficial ownership disclosures
On 14 November 2024, the Federal Treasury released the exposure draft Treasury Laws Amendment Bill 2024: Enhanced disclosure of ownership of listed entities (Cth) for public consultation. In summary, the Bill proposes to enhance the substantial holding and tracing notice regimes contained in the Corporations Act 2001 (Cth) which, among other things, govern the disclosure of beneficial ownership for listed entities. In summary, the Bill will: (1) require the disclosure of derivative-based interests (whether or not physically settled) to the market; (2) clarify that a person must disclose a substantial holding in an entity at the time that it initially lists on a financial market; and (3) provide ASIC with enhanced powers relating to the format of substantial holding notices and tracing notices (including a power to issue freezing orders in relation to compliance failures). Submissions close on 13 December 2024.
ASIC announces enforcement priorities for 2025, prompted by cost of living pressures on consumers
On 14 November 2024, ASIC announced that its regulatory priorities for 2025 include targeting misconduct in the superannuation industry, unethical property investment schemes, improper conduct by insurers, strengthening insider trading investigations, failures to have sufficient cyber-security protections, and greenwashing and other misleading environmental, social or governance claims (among other things). The new enforcement priorities seek to reflect the increased risks consumers are facing that are being driven by cost of living pressures. As discussed in a previous edition of Boardroom Brief, the regulator reported increases in the number of formal investigations and civil proceedings commenced in its annual report for 2023-24, and these enforcement priorities indicate that this trend may continue in the coming year. Our recent insight article further discusses how the regulator’s priorities for 2025 shine a firm spotlight on the superannuation sector.
Legal
ASIC commences proceedings against NAB for failing customers facing financial hardship
On 18 November 2024, ASIC announced that it had commenced proceedings in the Federal Court of Australia against NAB and its subsidiary AFSH Nominees Pty Ltd for allegedly failing to respond to 345 financial hardship applications between 2018 and 2023 within the 21 day statutory deadline. This enforcement action is consistent with the regulator’s focus on targeting misconduct involving a high risk of significant consumer harm and conduct targeting financially vulnerable consumers, which will remain a key focus for the regulator alongside its other enforcement priorities for 2025. ASIC Chair, Mr Joe Longo, stated that the regulator “will not hesitate to take decisive action when banks and lenders fail to comply with their obligations”. ASIC is seeking declarations, pecuniary penalties and adverse publicity orders against NAB and AFSH Nominees Pty Ltd.
Takeovers Panel publishes reasons for declining to conduct proceedings in relation to the affairs of AIMS Property Securities Fund
On 11 November 2024, the review Panel published its reasons for affirming the initial Panel’s decision to decline to commence proceedings in AIMS Property Securities Fund 04 [2024] ATP 18. As discussed in a previous edition of Boardroom Brief, the application alleged an association between the controlling unitholder of APW and other unitholders. Following consideration of the parties’ submissions, the review Panel considered that there was not a sufficient body of material to justify the review Panel making further inquiries into the alleged association, and held that there was no reasonable prospect that it would declare the circumstances unacceptable.
Over the horizon
Federal Government announces a proposed ‘digital duty of care’
On 14 November 2024, the Federal Minister for Communications, the Hon Michelle Rowland MP, announced that the Federal Government will seek to legislate a duty of care whereby digital platforms will be required to take reasonable steps to prevent foreseeable harms on their platforms and services, with the framework to be underpinned by risk assessment and risk mitigation, and informed by safety-by-design principles. Currently, the Online Safety Act 2021 (Cth) is usually applied remedially and on a case-by-case basis. In a speech to the Sydney Institute, Minister Rowland stated that “[w]hat’s required is a shift away from reacting to harms by relying on content regulation alone, and moving towards systems-based prevention”. The legislative approach of a ‘digital duty of care’ seeks to place the onus on digital platforms to proactively prevent online harms, bringing the governance of digital platforms in Australia in line with the requirements of the European Union’s Digital Services Act, and the UK’s Online Safety Act. While the penalty arrangements for breaching such a duty of care are yet to be announced, Minister Rowland indicated that the Federal Government would seek to ensure that the regulator can draw on strong penalty arrangements for non-compliance.