Section 63 Failure to Comply With Requirement

The Australian Securities and Investment Commission (ASIC) has the power to compel people to do a range of things to help it with its investigations. For example, a person can be compelled to attend and answer questions at an examination or to produce books of account or other business and financial records to ASIC investigators.

Section 63 of the Australian Securities and Investment Commission Act 2001 (ASIC Act) makes a failure to comply with a requirement imposed by ASIC a criminal offence, carrying penalties of up to 100 penalty units ($22,200) or two years imprisonment, or both.

How do I know if I am required to comply?

In general, ASIC is only able to force a person to do something by issuing them with a notice under the Act. If you have received a notice from ASIC it will ordinarily be very clear what you are required to do but you should consult a lawyer with experience in this area before you assume that the notice is valid and before you assume you understand what is required.

For example, ASIC might issue you with a notice under section 19 of the Act requiring you to attend an examination and answer questions in relation to an investigation. On the face of it, this seems like a fairly straightforward requirement (putting aside the potential implications of the information being given to ASIC) but a section 19 notice cannot compel a person to answer all questions that are asked. ASIC is only entitled to ask questions which directly relate to its investigation (as described in the notice) and, therefore, you must not assume that compliance with a section 19 notice means answering every question ASIC asks.

There are similar limitations on all of ASIC’s requirements and, therefore, we strongly recommend that you consult a lawyer with experience in this area if you have been issued with a notice by ASIC.

Privilege against self-incrimination

It is important to realise that, subject to some very limited exceptions, there is no privilege against self-incrimination in relation to an ASIC requirement. You are required to comply with a notice even if doing so will expose you to a risk of a penalty being imposed on you. This means that it is very important that you understand exactly what is and isn’t required of you.

What types of requirements can ASIC impose?

ASIC can, among other things, require you to:

• attend an examination pursuant to a section 19 notice.
• produce specified books relating to a body corporate pursuant to a section 33 notice.
• identify the property of a body corporate under section 39 of the Act (one of the few requirements that can be imposed without a specific notice).

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.