Mark Bland at the 2019 Professional Planner Best Practice Forum

ASIC is a step closer to being granted access to adviser phone calls after a Bill proposing increased surveillance powers was presented to parliament late last year and remains without amendment.

The Bill – which followed on from recommendations in the 2017 ASIC Enforcement Taskforce Review report – includes a proposal to change the Telecommunications Act so ASIC can “receive and use intercepted information for its own investigations”.

The amendment would make ASIC a ‘recipient agency’, meaning it would be on par with Federal Police in being able to request and receive materials from ‘interception agencies’ to support investigations into breaches of the Corporations Act.

Currently, ASIC can only receive a telephone intercept (TI) as part of an investigation involving a joint agency. In essence, the amendment would mean that ASIC can access recorded phone calls more readily if it suspects a breach and without the involvement of external agencies.

“It would entitle ASIC to receive information in certain circumstances where there’s a serious offence of the Corporations Act combined with other factors such as serious fraud,” says Mark Bland, a financial services lawyer at Mills Oakley and ex-ASIC employee. “This means they could receive material for a matter only ASIC is looking into.”

Bland says that while the proposed law would generally relate to serious offences like fraud and bribery, there is potential for “much broader use” in relation to the Corporations Act.

“On director’s duty, for example, there’s an offence around the obligation of good faith and good purpose, as well as other areas like disclosure of material [and] knowingly issuing a defective PDS,” he explains.

‘A tool any agency would like to have’

In April 2018 the government agreed in principle to all the ASIC Taskforce Review’s recommendations. Legislation was slow to follow, however, until the Hayne royal commission. When the Morrison government released its subsequent Restoring Trust in Australia’s Financial System roadmap, a commitment was made to fortify the regulator by strengthening, among other things, its TI powers.

Treasury’s consultation period for the proposal last year resulted in a mixed bag of submissions.

The Australian Competition and Consumer Commission (ACCC) supported the proposal after experiencing “very similar, if not identical problems” obtaining phone calls to use as evidence. The Australian Financial Markets Association (AFMA), on the other hand, derided the proposal as “administratively convenient to ASIC” and said it would erode existing privacy protections.

“Administrative inconvenience is not a sufficient public justification for undermining fundamental principles of good policy and civil protections,” the AFMA stated.

Several other bodies endorsed the proposal on the condition that either an independent review or privacy impact assessment were first completed.

The Law Council of Australia made the point that while ASIC already has the power to access phone calls as part of a joint investigation, anything that requires further powers is probably serious enough to bring in heavier artillery anyway.