After the Federal Government’s proposed legislation to extend the temporary relief for corporations to conduct virtual meetings stalled in the Parliament, we speculated in our recent update as to whether ASIC would issue a ‘no action’ position, electing not to take regulatory action against companies conducting virtual meetings despite requirements to do so in the Corporations Act 2001 (Cth) (Corporations Act).
ASIC has now issued such a ‘no action’ position. In summary, ASIC will not take regulatory action in respect of the following matters.
As noted previously, while (subject to a company’s constitution) the Corporations Act permitted ‘hybrid’ meetings (i.e. a combination of a physical location and the use of technology), there was doubt as to whether a ‘virtual’ meeting (i.e. online only) was permitted by the Act. ASIC’s position therefore is that, until the earlier of 31 October 2021 and Parliament passing its own measures, companies may convene and hold meetings from 21 March 2021 onward using ‘virtual’ technology and may issue notices of meeting electronically.
For virtual meetings, the conditions of relief require:
For notices of meeting, the conditions of relief require:
ASIC has re-issued its guidelines for conducting meetings using technology.
For public companies with financial years ending up to 7 April 2021, ASIC will not take action for AGMs that are deferred for up to two months beyond the statutory deadline.
For entities with financial years that end after 7 January 2021, ASIC has not extended its ‘class’ relief for lodging financial reports under Chapters 2M and 7 of the Corporations Act. Any entity seeking such relief will need to make an individual application to ASIC.
As was the case last year, ASIC’s position will provide a degree of comfort for companies that the regulator will not take action for these limited forms of statutory non-compliance. However, companies will need also to assess the risk of shareholder action alleging a virtual meeting or use of electronic notices is unlawful or, where applicable, inconsistent with the company’s constitution, and/or action by other regulators or prosecutors.
Gadens’ experienced corporate governance practitioners can assist your company navigate the impact of ASIC’s relief for your organisation.
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Adam Walker, Partner
Matthew Burge, Partner