Author: Editor

Keeping up appearances: ASX revises guidance on trading policies

facebook Twitter LinkedIn RSS On 30 January 2015 the ASX released an updated Guidance Note 27: Trading Policies (GN 27).  The release came after some highly publicised events that have called into question certain listed entities’ approach to, and enforcement of, share trading policies. For example, the allegations of inappropriate share trading by two directors of David Jones in 2014, which led to an ASIC investigation of perceived insider trading activity.  Ultimately, ASIC did not take enforcement action against the directors involved. However, the subsequent resignation of the directors and the damaging publicity the matter caused for David Jones (since de-listed from the ASX), demonstrates the importance of having an effective trading policy in place which is enforced properly. One size does not fit all GN 27 emphasises that entities shouldn’t take a ‘cookie-cutter’ approach to drafting their trading policy.   Good governance ‘demands that an entity has in place a fit-for-purpose trading policy, tailored to its particular circumstances, that regulates when and how its directors and senior executives may trade in its securites.  The purpose of such a policy is not only to minimise the risk of insider trading but also to avoid the appearance of insider trading and the significant reputational damage that may cause.’ The two key themes of avoiding ‘risk’ and the ‘appearance’ of insider trading should inform how an entity reviews its trading policy in light of...

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Two new ‘10002’ complaints handling standards – now that’s confusing

Digital advice: ASIC provides guidance on AFSL compliance facebook Twitter LinkedIn RSS When the new ISO 10002:2014 standard was released in July 2014, a quick comparison with the old International ISO 10002:2004 and Australian AS/ISO 10002:2006 standards (which are essentially the same document) revealed only minor technical amendments. Hardly worth writing about. So when the Council of Standards Australia released AS/NZS 10002:2014 in October 2014, we nearly didn’t bother downloading it. After all, one could well be excused for presuming that the new Australian standard was simply another adoption of the international standard. Luckily, we did bother, because a simple comparison of the weight and thickness of the two documents immediately gave rise to a suspicion that something was amiss. Yes, you guessed it – the new International Standard ISO 10002:2014 and the new Australian Standard AS/NZ 10002:2014 are in fact very different documents. Even reading this article you may have missed the fact that even though the numbering convention ‘10002’ is consistent, the new Australian Standard has dropped the ‘ISO’ that preceded the old 2006 standard. For clarity, ISO refers to the International Organisation for Standardisation, the international standards governing body, whilst AS refers to Standards Australia – the Australian standards governing body. So what is going on? What are the implications for Australian businesses and regulators that reference these standards? As to ‘what’s going on’ – we are...

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17 March 2015: Workplace Relations Update for Executives On-the-Go

Failed drug test justified employer’s treatment of employee facebook Twitter LinkedIn RSS In this edition: a lesson on how to enforce a zero-tolerance drugs policy; International Women’s Day and your workplace; and risk assessments can ensure safety and protect your job. Failed drug test justified employer’s treatment of employee Mr Hayes (we’ve used pseudonyms) was employed at the Company, which operated a power station facility. Mr Hayes was involved in the operation of a coal train unloading system and held other responsibilities as a Rail Safety Worker. The Company randomly tested its employees for drug and alcohol consumption, consistent with its policies and procedures in relation to drug and alcohol consumption. The Company had a policy of zero-tolerance for drugs and alcohol. On 22 August 2014 Mr Hayes was tested, along with 11 other employees. He returned two ‘non-negative’ drug test results and was stood down pending a disciplinary hearing. Mr Hayes subsequently admitted he had taken amphetamines around 36 hours before being tested. Two other employees had returned non-negative drug tests from the same testing date and one employee was not dismissed as a result of his expressed remorse and previous employment history. At a meeting on 3 September 2014 between Mr Hayes, members of his union (the CFMEU), and Company representatives, Mr Hayes resigned. Mr Hayes then launched proceedings under the Fair Work Act 2009(Cth) arguing that he had...

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What do your not-for-profit directors want?

Key findings facebook Twitter LinkedIn RSS The results of the 2014 NFP Governance and Performance Study (the Study) by the Australian Institute of Company Directors have revealed some interesting insights into the priorities and concerns of not-for-profit (NFP) boards. Importantly, NFP directors are pushing for greater reporting of non-financial information, including on whether they have achieved their NFP’s mission. Key findings Some key findings of the Study are that: non-executive directors spend 13% of their time on risk oversight and 12% on compliance; 40% of directors want more non-financial information, specifically on risk; 50% of directors believe board performance is not measured effectively; 17% of boards are seeking to change their legal structure. 60% of NFPs are currently incorporated associations, 12% unincorporated associations and 14% are companies limited by guarantee; mergers are being discussed by 30% of boards; nearly three-quarters of non-executive directors (NEDs) reported that their boards had undertaken one or more forms of formal professional development (PD) in the last year; more than 60% of NEDs believe the relationship between their board and their CEO is ‘very good or excellent’; and an NFP director spends an average of 20 hours a month working for a single NFP. We elaborate on some of these key findings below. Director contribution is significant The amount of time a director spends working for an NFP varies between size and sector. Directors in the...

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Financial Services Update: How Can AFSL Audit Prompt an ASIC Surveillance Visit?

How can an AFSL audit prompt an ASIC surveillance visit? facebook Twitter LinkedIn RSS In this edition: How can an AFSL audit prompt an ASIC surveillance visit?; Enhanced risk management – back to the drawing board?; and Financial Advisers Register to come in March 2015. How can an AFSL audit prompt an ASIC surveillance visit? Although regulators and industry members will always continue to beat the compliance drum, recent regulatory changes may increase the risk of an ASIC visit. Australian Financial Services Licence (AFSL) holders will be aware that each financial year their AFSL auditor is required to provide ASIC with a limited compliance audit relating to the Licensee’s compliance with their financial obligations. A broader compliance audit is not required under the law, unless ASIC is prompted to initiate a wider audit by, say, an AFSL audit report. For any AFSL holder who has ever breached their licence obligations, the Corporations Act 2001 (Cth) (the Act) gives licensees the discretion to report to ASIC only those breaches which are considered ‘significant’ or ‘material’, having regard to the criteria in the Act and ASIC Regulatory Guide 78. Unfortunately, the Act gives AFSL auditors no such discretion to report only those breaches which they consider significant or material. Under s 990K they have to report to ASIC with 7 days any matter they become aware of in carrying out their duties, that:...

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23 January 2015: Workplace Relations Update for Executives On-the-Go

The anti-bullying jurisdiction is here to stay facebook Twitter LinkedIn RSS In this edition, three lessons: the anti-bullying jurisdiction of the FWC is here to stay, and sometimes it even works; employers should take care to state explicitly the consequences of breaching their policies; and a former employee gets a $50,000 damages order for breaching his employer’s IP rights. The anti-bullying jurisdiction is here to stay In what appears to be the first successful application of the Fair Work Commission’s (FWC) power to make ‘stop-bullying’ orders, the FWC has revoked an order on the basis that it has been successful. The decision by the FWC to lift the previous ‘stop-bullying’ orders, which followed a request by the applicant, demonstrates that the new anti-bullying scheme is working. Although the facts of the original application to the FWC are confidential and unavailable, the different orders made in this case have been published and their contents present an intriguing story. What is known about this case is as follows (names are pseudonyms). An application was brought by F against C in March 2014. They both worked at D. Following a conference between the parties, the FWC made orders that: C shall complete any exercise at the premises of D before 8:00am. C shall have no contact with F alone. C shall make no comment about F’s clothes or appearance. C shall not send any...

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16 December 2014: Workplace Relations Update for Executives On-the-Go

2014 in review facebook Twitter LinkedIn RSS In this edition: 2014 in review; and five fast facts for festivities. 2014 in review 2014 has been a year of change. With the amendments to the Privacy Act 1988 (Cth) taking effect at the start of the year, privacy has been on the minds of many. Our articles on the privacy procedures, practices and systems (Part 1, and Part 2) you need to implement to comply with the new laws were widely read, and useful as a plain English explanation of the new laws. In Human Resources and Employment Law, this year’s theme has been that employers should be wary of dismissing someone for the right reasons, but in the wrong way. Providing employees with the right to respond to allegations, an opportunity to have a support person, and conducting an appropriate investigation, all help to protect an employer from unfair dismissal claims. The importance of managing employment policies, in order to rely on them when making decisions, was also featured this year. In one case we noted, two flight attendants whom Qantas claimed had mis-used CabCharge vouchers, were reinstated because Qantas could not show evidence that the employees knew and understood the policy that they had purportedly breached. Significant court decisions have also turned attention to employers and their responsibilities in dealing with workplace sexual harassment and sex discrimination. In this year’s landmark decision of Richardson v Oracle Corporation, the Federal Court...

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ASIC’s Media Blitz: Cyber Security, The Professionalisation of Financial Advisors, and ‘Skin in the Game’

facebook Twitter LinkedIn RSS The past week has been a very busy one for ASIC Chairman Greg Medcraft, who has given three speeches outlining ASIC’s strategy and priorities. The speeches were given at a Bloomberg event, to the Parliamentary Joint Committee on Corporations and Financial Services and most recently, to the National Press Club of Australia. His three speeches shows where ASIC will be focusing its attention as we move into the new year. Boards must be alive to the risk of cyber attack Giving the Bloomberg Address, Sydney, Mr Medcraft named cyber security as a key risk of the digital age, facing all organisations. A systemic risk Mr Medcraft described cyber crime as a ‘systemic risk’, which has caught the attention of global policy makers. An incident of cyber attack can affect: the integrity and efficiency of global markets; the protection of investors; and ultimately, trust and confidence in the financial system. All of the above occurred earlier this year when, as reported by Forbes, a cyber attack on JP Morgan Chase in America, reportedly compromised the personal information of 76 million households and seven million small businesses. Cyber-security and its growing importance, was also addressed by the Financial System Inquiry in its Interim Report earlier this year (see our blog). ASIC’s advice Mr Medcraft advocates ‘cyber resilience through risk management’ to combat the threat of a cyber attack. Echoing views he...

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26 November 2014: Workplace Relations Update for Executives On-the-Go

Sickies costing $33 billion a year facebook Twitter LinkedIn RSS In this edition: sickies costing $33 billion a year; victim awarded $733,000 for ‘systematic’ sexual harassment; and WA seeks feedback on new mining safety laws. Sickies costing $33 billion a year A 2014 Absence Management & Wellbeing Survey by an absence management agency, Direct Health Solutions, has found that employees are taking nearly 10 sick days a year, costing employers over $33 billion in payroll and lost productivity costs. According to an article in the Sydney Morning Herald, the survey says that employees averaged 9.5 days of sick leave in 2013, at a cost of $3,230 per employee; employers said that the most common reasons for short-term employee absence was unexpected illness (82%) and carer’s leave (68%); employees are most likely to be absent on a Tuesday and least likely to be absent on a Friday; four out of five organisations indicated that short-term absences of two days or less were most problematic; and employees in the tourism and hospitality industries had the highest level of absenteeism at 11.9 days a year and the healthcare and manufacturing industries had the lowest levels of staff absences at 7.5 and 7.4 days each. Although these statistics provide an interesting insight into the economic cost of illness, the average number of sick days taken was still less than the amount allowed by law and...

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Financial Services Update: ASIC’s Report Card – key points from its annual report

ASIC’s Report Card: key points from its annual report facebook Twitter LinkedIn RSS In this edition: ASIC’s Report Card: key points from its annual report; updated guidance for credit licensees on their responsible lending obligations; and AUSTRAC releases annual report for 2013-14 ASIC’s Report Card: key points from its annual report On 29 October 2014 ASIC’s Annual Report 2013-2014 was tabled in Federal Parliament and subsequently released on ASIC’s website. The report  contains some interesting facts and figures on ASIC’s performance for the previous financial year and improvement initiatives for the future. Despite some claims in the media that ASIC is ‘a regulator that doesn’t believe in regulation‘, the statistics promoted in the report suggest otherwise. Read on for some fast facts on ASIC for the reporting period 2013-14. Funding and fees Funding: ASIC received $347 million in government funding, $3 million less than in 2012-2013. ASIC also received $5 million in ‘other revenue’, $12 million less than in 2012-13. Less funding was received for investigating regulatory breaches, and an increase in operational costs was reported. The Companies Unclaimed Monies Special Account was abolished in December 2012. Revenue: ASIC raised $763 million in fees and charges for the Commonwealth, an increase of 6% from 2012-13. According to the report, the increase in revenue is due to an increase in new companies being registered, an increase in Business Names revenue and...

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