The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2017 (Bill) was introduced into the House of Representatives on 24 October 2018. The Bill reflects some of the recommendations the ASIC Enforcement Review Taskforce made in December 2017.
If passed, the changes will affect the Corporations Act 2001 (Cth) (Corporations Act), the Australian Securities and Investments Commission Act 2001 (ASIC Act) and the National Consumer Credit Protection Act 2009 (NCCP Act).
- maximum penalties for certain criminal offences would increase.
- financial penalties would increase, especially for civil penalty provisions.
- imprisonment would be removed as a penalty for strict and absolute liability offences, replaced with significantly increased financial penalties.
- Courts would be given more discretion to ensure victims of financial crime are compensated.
The ASIC Enforcement Review Taskforce made recommendations to the Government in December 2017 to strengthen the requirements for financial services and credit licensees to report significant breaches to ASIC, and increase penalties for misconduct. While not yet included in amendments, the Taskforce also recommended that ASIC be granted access to telephone intercepts to investigate and prosecute corporate offences.
The Bill proposes a new formula for calculating financial penalties for criminal offences, makes a wider range of offences subject to civil penalties, and inserts a new definition of dishonesty into the Corporations Act. Some examples of offences where the maximum imprisonment term has increased are detailed in the tables below:
To discuss how the changes may affect your legal obligations, please contact Hillary Ray of our Financial Services team.