COVID-19 (Coronavirus) Financial Services Regulatory Response as at 6 May 2020

Electronic company meetings and signing and witnessing of company documents now permitted

The Commonwealth Treasurer has made the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 which amends the Corporations Act 2001 to enable Annual General Meetings to be run electronically, and to enable electronic signatures to be used in signing company documents, to address the physical distancing impacts of the Coronavirus.

The changes are temporary and expire on 5 November 2020.

The Determination ensures that companies that are required to or wish to hold a meeting, such as an Annual General Meeting (AGM), may do so using technology rather than face-to-face meetings. The Determination enables a quorum, votes, notices and the asking of questions to be facilitated electronically. The Determination also allows for information required for the meeting to be circulated and accessed electronically.

Signing documents
The Determination alters the operation of section 127 of the Corporations Act to give certainty that when company officers sign a document electronically (including an electronic document), the document has been validly executed.

The Determination provides that a company may execute a document without a common seal if each person required to sign the document on behalf of the company either  signs a copy or counterpart of the document in physical form or uses electronic communication which reliably identifies the person and indicates the person’s intention about the contents of the document.

In both cases the physical or electronic communication must include the entire contents of the document but does not need to include the signature of another person signing the document physically or electronically.

The methods of signing a document electronically could include pasting a copy of a signature into a document, signing a PDF on a tablet, smartphone or laptop using a stylus or finger or cloud-based signature platforms like DocuSign.

The modification means that signatories do not need to sign the same physical document. Instead, a document could be signed and scanned by the first signatory and then printed and signed by the second signatory, or separate electronic signatures could be applied to fully electronic versions of the document.

Draft COVIDSafe app legislation released

The Attorney-General has released draft legislation that will codify the protections for individuals’ data collected by the COVIDSafe app that have been established in the Health Minister’s Biosecurity Act Determination.

The Government will introduce the Bill into Parliament in the week of 11 May 2020.

UPDATE: Bill passed and given Assent on 15 May 2020.

The Privacy Amendment (Public Health Contact Information) Bill 2020, will reinforce the protections set out in the Determination made by the Minister for Health under the Biosecurity Act 2015 on 25 April 2020, placing the protections into primary legislation through amendments to the Privacy Act 1988.

Under the determination, it is a criminal offence to collect, use or disclose COVIDSafe app data for a purpose that is not related to contact tracing. It is also a criminal offence to coerce a person to use the app, to store or transfer COVIDSafe app data to a country outside Australia and to decrypt app data. A maximum penalty of 5 years imprisonment or $63,000 applies to breaches of the determination.

The legislation will also introduce the following additional protections:

  • The national privacy regulator, the Office of the Australian Information Commissioner (OAIC), will have oversight of COVIDSafe.
  • The OAIC can manage complaints about mishandling of COVIDSafe data and conduct assessments relating to maintenance and handling of that data.
  • The Privacy Act’s Notifiable Data Breaches scheme will be extended to apply to COVIDSafe data.
  • The interaction between the powers and obligations of the OAIC in relation to COVIDSafe data with the powers of state and territory privacy regulators and the Australian Federal Police will be clarified.
  • The administrator of the National COVIDSafe Data Store will delete users’ registration data upon request.
  • An individual will be required to delete COVIDSafe data if they receive it in error.
  • No data can be collected from users who have chosen to delete COVIDSafe.
  • A process will be put in place for COVIDSafe data to be deleted at the end of the COVID-19 pandemic and users to be notified accordingly.

Modern Slavery Act reporting extension

Due to COVID-19, the Government has announced that the deadlines for entities due to lodge statements under the Modern Slavery Act 2018 (Cth) will be extended by three months. Background.

The Act requires entities to submit modern slavery statements to the Australian Border Force within six months after the end of their reporting periods.

The extension applies to all reporting entities under the Act operating on reporting periods that end on or before 30 June 2020.

The table below summarises the new reporting deadlines:

Reporting period  Original deadline for submission of modern slavery statement New, extended deadline for submission of modern slavery statement
1 April 2019 – 31 March 2020 (Foreign Financial Year) 30 September 2020 31 December 2020
1 July 2019 – 30 June 2020 (Australian Financial Year) 31 December 2020 31 March 2021

The six month deadline for reporting periods ending after 30 June 2020 remains unchanged.

The Government said that the decision to temporarily extend reporting deadlines recognises the significant and unprecedented impact of COVID-19 on Australian businesses and global supply chains. The extension will provide businesses additional time to ensure they are able to comply with their legislative obligations.

Electronic signing and witnessing in Victoria

The COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) (COVID-19 Act) has introduced temporary amendments into the Oaths and Affirmations Act 2018 (Vic) allowing for legal documents, such as affidavits, to be signed by electronic signature for the next 6 months.

The changes are similar to the recent changes in NSW and Queensland:

  • Affidavits may be signed and witnessed electronically.
  • The requirement that a document must be signed in the presence of another person may be satisfied by the deponent and the authorised affidavit taker doing the thing by means of audio link or audiovisual link.
  • The requirement that the original copy of an affidavit be signed may be satisfied by the authorised affidavit taker signing or initialling a scanned hard copy or an electronic copy of the affidavit.

ASIC clarification on responsible lending during the COVID-19 pandemic

ASIC has published a letter it sent to the Australian Bankers Association in response to the ABA’s request for guidance on a number of matters around regulation of lending during the COVID-19 pandemic.

ASIC’s letter deals with issues of hardship variations, responsible lending, and the obligation to act efficiently, honestly, and fairly. 

ASIC emphasised the importance of responsible lending obligations in providing key protections so that short-term assistance does not become a longer-term, unmanageable burden for consumers.

I discuss the letter in detail here.

COVID-19 and financial hardship: retail lenders’ obligations and ASIC’s expectations

ASIC has reminded lenders of their obligations under section 72 of the National Credit Code, whereby a lender must consider varying a consumer’s credit contract if a consumer notifies them that they are or will be unable to meet their credit obligations.

ASIC says it is closely monitoring how lenders are assisting consumers who are experiencing financial difficulties due to COVID-19.

Lenders must also do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly, and fairly.

ASIC says to respond to consumer financial difficulties fairly, lenders should consider the following five points in their processes:

  • Advise consumers of different available options that may assist them.
  • Ensure all communications with consumers are clear and provide consumers with sufficient information to make an informed decision about the assistance available. This should include details of how different assistance options will affect the consumer’s loan and repayments over the short and long term, including the effect of capitalising interest (where relevant).
  • Be flexible and offer tailored solutions to consumers where a standardised approach may not meet the consumer’s needs. For example, if a consumer has had their loan repayments deferred, a lender should ensure that how a consumer will catch up on missed repayments is manageable and offer alternatives.
  • Have ongoing communications with consumers throughout the period of assistance to ensure that any assistance offered remains appropriate and continues to meet their needs.
  • Communicate with consumers as their period of assistance comes to an end to understand their financial circumstances at that time, respond as appropriate, and ensure each consumer understands what will happen next.

APRA publishes first data on the temporary early release of superannuation scheme

The Australian Prudential Regulation Authority (APRA) has published its first industry-level data related to benefits paid to members through the Government’s COVID-19 temporary early release of superannuation scheme.

For the week ending on 26 April, the 167 funds regulated by APRA reported that they:
• received 665,310 applications for early release;
• processed 162,879 applications; and
• paid members $1.3 billion. The average benefit paid was $8002.

For applications paid in the first week of the scheme, trustees took an average of 1.6 days to make payments to eligible members after receipt of their applications from the ATO.

APRA intends to publish updated data every Monday, and will expand the publication next week to include fund-level data.

Safe Work Australia information on COVID safe workplaces

Safe Work Australia has published information on COVID safe work practices required to comply with workplace health and safety laws for a number of sectors including financial and insurance services and call centres.

The information includes health monitoring, physical distancing, hygiene, and cleaning.

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David Jacobson

Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

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