What should you do if the regulator comes knocking?

In Brief

This article introduces a series of forthcoming publications relevant to employees, directors and officers of corporations relating to the powers of the corporate regulators, primarily ASIC, and what to do when those regulators come knocking.  

Corporate regulators in Australia have broad powers to monitor, investigate and enforce compliance with a particular area of law or regulation. It is important to understand the differences between the corporate regulators in Australia and your rights should a regulator coming knocking. 

Well-known regulators include:

• The Australian Securities and Investments Commission (ASIC): Australia's integrated corporate, markets, financial services and consumer credit regulator, responsible for administering and enforcing the Corporations Act 2001 (Cth), among other legislation. 

• The Australian Competition and Consumer Commission (ACCC): enforces the Competition and Consumer Act 2010 and a range of additional legislation promoting competition, fair trading and regulating national infrastructure. 

• The Australian Taxation Office (ATO): administers the tax, excise and superannuation systems as provided by legislation. 

Regulators' powers to monitor and investigate suspected contraventions and enforce compliance are specific to each regulator, and the relevant legislation. In general, they all have powers to compel:

• compliance with search and seizure warrants

• production of documents

• attendance at an oral examination

• reasonable assistance with an investigation

In addition, regulators may be assisted in their investigations by an authorised agency, such as the Australian Federal Police, including obtaining a warrant to intercept communications and executing warrants of search and seizure. 

Consequences of non-compliance with a regulator  

Failure to comply with a regulator, which is validly and properly exercising its powers, can result in penalties including fines and in serious circumstances, imprisonment.

Regulators have become increasingly sophisticated and proactive in their approach in monitoring, investigating and enforcing compliance. The extent and vigour of regulators' powers requires you to know your rights in advance and get on the front foot, to ensure an appropriate and effective response if a regulator does come knocking. 

The White Collar Crime and Regulatory Compliance team, led by David Grant and Katherine Jones, will be releasing a series of short articles over the coming months which will set out practical tips and examples of what to do should a regulator come knocking, with a:

1. warrant

2. notice to produce documents

3. notice to attend an oral examination

In circumstances where each regulator has powers specific to their applicable legislation, our upcoming articles will focus on the corporate regulator, ASIC, and its powers under the ASIC Act 2001 (Cth).