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Section 30 and Section 33 Notices – ASIC’s Power to Compel Production of Books

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Rachel Erlich Senior Associate Linkedin

The Australian Securities and Investments Act 2001 (Act) gives ASIC the power to issue section 30 and section 33 notices compelling the production of certain books.

Section 30 and section 33 notices are tools that ASIC can use when undertaking surveillances.  ASIC may also issue these notices when conducting investigations into suspected breaches of the law in order to obtain information and documents from those that are the subject of the investigation as well as from those who are not.

When can ASIC issue a section 30 and section 33 notice?

ASIC may only issue section 30 and section 33 notices for limited purposes.  These purposes include:

  1. for the performance or exercise of any of ASIC’s functions or powers under the Corporations Act 2001 and the ASIC Act (Corporations Legislation);
  2. to ensure compliance with the Corporations Legislation;
  3. in relation to an alleged or suspected contravention of:
    1. the Corporations Legislation; or
    2. a law of the Commonwealth or of a State or Territory that concerns the management or affairs of a body corporate or involves fraud or dishonesty and relates to a body corporate or a financial product; or
  4. for the purposes of a formal investigation.

What is a section 30 notice?

By issuing a section 30 notice, ASIC can compel a person, company or responsible entity to produce specific books relating to the affairs of a company or registered scheme.  Although the word “books” produces a mental picture of physical books and a visit to the library, the word is defined very broadly and includes any record of information.  So, a section 30 notice may also require the production of electronic data and files.  To extend its reach even further, the word “books” includes “documents” and the definition of a “document” includes any article or material from which sounds, images or writings are capable of being reproduced with or without the aid of any other article or device.

What is a section 33 notice?

Amongst other things, by issuing a section 33 notice, ASIC can compel a person to produce specific books in their possession and which relate to, amongst other things:

  • the affairs of a company
  • the affairs of a registered scheme; and
  • a financial service.

A section 33 notice shares the same definitions of “books” and “document” to a section 30 notice, and so a section 33 notice may require the production of electronic data and files.

What must be set out in a section 30 notice and a section 33 notice?

A section 30 notice and a section 33 notice must be issued by ASIC in writing and must:

  • describe the documents sought by ASIC; and
  • set out the time and place for the production of the documents and the ASIC staff member to whom they should be produced.

The time and place for the production of the documents must be a reasonable time from the date of service of the notice, and factor in the documents required for production and the type of inquiry being undertaken.

The notice must also explain in general terms the basis upon which ASIC requires production of the documents.

ASIC has released document production guidelines

In March 2020, ASIC issued document production guidelines which outline ASIC’s preferred methods for the production of books.

In Information Sheet 142, ASIC says: “if you do not produce books in accordance with the guidelines, ASIC may ask you to produce the books again following the guidelines.”

The guideline also set out how ASIC can help the recipient of a section 30 or section 33 notice.

You must comply with section 30 and 33 notices

You commit an offence if you intentionally or recklessly fail to comply with a section 30 or 33 notice.

However, you do not have to provide ASIC with books or parts of books that attract legal professional privilege.  ASIC sets out the process for claiming legal professional privilege over books in Information Sheet 165.

You should therefore carefully examine any books that fall within the scope of a section 30 or section 33 notice to determine whether they attract legal professional privilege and therefore do not need to be provided to ASIC.  You may, and should, seek advice in this regard.

Recent court case

A case recently brought by ASIC in the Federal Court of Australia (ASIC v Maxi EFX Global AU Pty Ltd [2020] FCA 1263) has confirmed ASIC’s broad power to compel parties it regulates to provide it with books.  This case also demonstrates that ASIC will enlist the Court’s assistance to ensure compliance with a section 33 notice it has issued.

As part of an investigation, ASIC issued a section 33 notice to Maxi EFX Global AU Pty Ltd (Maxi EFX) requiring it to produce books.  While a large number of books were produced to ASIC pursuant to the notice, not all of the required books were produced.  ASIC sought an order from the Court requiring Maxi EFX to comply fully with the section 33 notice.

Maxi EFX opposed the order sought by ASIC and argued that the section 33 notice was invalid as it was unclear, sought an unreasonably broad range of books, and that certain books were in the physical possession of overseas third-party service providers and were therefore unable to be produced.

The Court held that the notice was validly issued and was not too broad.  The Court also held that documents held by overseas third-party providers were held “on behalf of, or on account of” Maxi EFX and were therefore still in Maxi EFX’s “possession, custody or control”.

The Court noted the distinction between ASIC’s information-gathering powers and the discovery and subpoena regimes of various courts.  The former is more far-reaching and, unlike the latter, cannot be objected to on the basis that ASIC is on a “fishing expedition”.

Justice Wigney also stated that “…it is tolerably clear that mere inconvenience and expense would not ordinarily provide a reasonable excuse for non-compliance.”

What should you do if you receive a section 30 or section 33 notice?

As it is an offence to intentionally or recklessly fail to comply, you must take a section 30 and section 33 notice seriously.  It may indicate that ASIC has reason to suspect that you may have contravened the Corporations Act and is actively investigating you.

If you receive a section 30 or section 33 notice (or any other notice), you should seek advice as soon as possible, and in particular in relation to:

  • the scope of the notice i.e. what is covered by the notice and whether the notice is oppressive with regard to the volume of books required and the length of time provided to produce them; and
  • whether any of the books required to be produced attract legal professional privilege.

Author: Rachel Erlich (Senior Associate)