Treasury Laws Amendment (ASIC Governance) Act 2018

The Treasury Laws Amendment (ASIC Governance) Act 2018 is a Commonwealth amending Act. Its stated purpose is to provide for an additional Deputy Chairperson of ASIC, and for related purposes.

The Act amends the Australian Securities and Investments Commission Act 2001 and also makes a minor terminology amendment to the Foreign Evidence Act 1994. The central effect is that ASIC can have up to 2 Deputy Chairpersons at the same time. The Act also updates related meeting, acting appointment and transitional provisions so the governance framework works with that change.

For most businesses, this is not a direct compliance law in the usual sense. It does not tell businesses to lodge a new form, change customer documents or meet a new operational standard. Its practical importance is that it changes the legal framework for how ASIC is led and how ASIC's leadership can continue functioning when senior officeholders are absent or when deputy roles need to be filled.

This Act is most relevant to businesses and advisers who interact with ASIC in a formal way. That includes companies making lodgements, financial services and credit businesses dealing with ASIC as regulator, and legal or compliance teams preparing documents that refer to ASIC officeholders or governance arrangements.

It is also relevant to directors, founders, company secretaries and professional advisers who need to describe ASIC accurately in board papers, compliance manuals, submissions, due diligence reports or training materials. If older materials assume there is only one Deputy Chairperson of ASIC, they may now be outdated.

Businesses that have little contact with ASIC beyond routine company registration and annual review processes will usually be affected only indirectly. Even then, the Act is still part of the legal framework governing the regulator that oversees companies and many financial market participants.

The Act makes a series of amendments in Schedule 1. The first change updates the definition of Deputy Chairperson in subsection 5(1) of the ASIC Act by replacing a reference to "the Deputy Chairperson" with "a Deputy Chairperson". That wording change supports the broader structural change that more than one person can hold the office.

The Act then replaces section 10 of the ASIC Act. Under the new section, the Governor-General is to appoint as Chairperson of ASIC a person who is, or is to be, a full-time member. The Governor-General may appoint as a Deputy Chairperson of ASIC a person who is, or is to be, a full-time member. The section also states that not more than 2 persons may hold office as Deputy Chairperson at any one time.

That is the core practical amendment. Before relying on older descriptions of ASIC's structure, businesses and advisers should recognise that the law now allows 2 Deputy Chairpersons, not just one. This is mainly a governance and terminology point, but it can matter where precision is important.

The Act also updates ASIC's meeting rules in subsection 106(2) and (3). In the absence of the Chairperson from a meeting, if there are 2 Deputy Chairpersons available to preside, the Chairperson may nominate one of them to preside. If there is only one Deputy Chairperson available to preside, that Deputy Chairperson is to preside. If neither the Chairperson nor any Deputy Chairperson is present at a meeting, the members present must elect one of their number to preside.

These changes are practical governance machinery. They help ensure ASIC can continue to conduct meetings clearly and lawfully when the Chairperson is absent and where there may be more than one Deputy Chairperson.

The Act also replaces section 118 of the ASIC Act dealing with an Acting Deputy Chairperson. The Minister may appoint a member to act as a Deputy Chairperson during a period when there are fewer than 2 persons holding the office of Deputy Chairperson, or during a period when a Deputy Chairperson is absent from office or is acting as Chairperson.

For businesses, these provisions do not usually create a direct task. Their importance is that they explain how ASIC's leadership continuity is maintained. That can matter in a live regulatory matter where a business or adviser needs to understand ASIC's officeholder structure accurately.

The Act inserts a transitional provision into the ASIC Act as Part 26. Section 315 states that the Treasury Laws Amendment (ASIC Governance) Act 2018 does not affect an appointment of the Chairperson, a Deputy Chairperson or a member under the ASIC Act. It also states that this saving rule does not prevent the termination of an appointment.

The practical point is that the governance amendments were not intended to unsettle existing appointments simply because the statutory structure changed. If you are reviewing historical governance arrangements around the commencement date, this saving provision is part of the picture.

The Act also amends subsection 35(1) of the Foreign Evidence Act 1994 by replacing "the Deputy Chairperson" with "a Deputy Chairperson". This is a minor terminology alignment amendment. It does not appear from the text to create a separate business compliance burden, but it is useful to know that the Act reaches beyond the ASIC Act in this limited way.

Although this Act is mainly institutional, there are practical situations where it becomes relevant. One common trigger point is when a business or adviser is preparing formal material that describes ASIC's leadership structure. Another is when a regulated business is dealing with ASIC on a licence, exemption, notice, surveillance or enforcement matter and wants to understand the regulator's officeholder framework accurately.

The Act can also matter when reviewing older precedents, compliance manuals or training materials. Documents prepared before June 2018 may refer to ASIC as if there can only be one Deputy Chairperson. That may now be legally incomplete or outdated.

In disputes or sensitive regulatory matters, businesses should be careful not to overread this Act in isolation. It is an amending Act, so the current legal position is best checked in the latest consolidated principal legislation. This page is most useful as a guide to what changed and when.

For most businesses, the practical obligation is not a statutory filing or reporting duty created by this Act. Instead, the sensible compliance step is to make sure any legal or governance material that relies on ASIC's officeholder structure is accurate and current.

If your business is in a heavily regulated sector, or if you are involved in a live ASIC matter, it is worth checking whether internal documents, external submissions or advice notes still use outdated singular references to the Deputy Chairperson. Precision matters most where a document is intended to explain ASIC's authority, governance or process.

Because this is an amending Act, businesses should also avoid relying on it as the only source for a current legal position. The safer approach is to read it together with the latest consolidated version of the ASIC Act and, where relevant, obtain legal advice on any live issue involving ASIC authority, appointments or procedure.

The Act was assented to on 22 May 2018. Under the commencement table, the whole Act commenced on the day after the end of the period of 14 days beginning on the day it received Royal Assent. The legislation records the commencement date as 5 June 2018.

The legislation is recorded as in force. As with many amending Acts, the practical legal effect now sits mainly in the amended principal legislation. If you need to rely on the current law, check the latest authorised version of the Australian Securities and Investments Commission Act 2001 as well as this amending Act.