This article was written by Alexander Morris and Jaslyn Ng.
ASIC chairman James Shipton has indicated that the regulator intends to have public hearings about responsible lending practices. In a keynote address to the Committee for Economic Development of Australia today, Mr Shipton stated that ASIC was updating its responsible lending guidance, and as part of its consultation, public hearings would be held to “robustly test some of the issues and views that have been raised in submissions”. This follows ASIC’s consultation paper on updating its guidance on responsible lending that was issued in mid-February 2019.
ASIC’s power to hold hearings arises primarily out Pt 3 Div 6 of the Australian Securities and Investments Commission Act 2001 (Cth). This legislation permits the regulator to hold hearings for the purposes of the performance or exercise of any of its functions and powers under the corporations legislation. Pt 6-5 Div 2 of the National Consumer Credit Protection Act 2009 (Cth) contains a parallel provision in respect of the performance or exercise of any of ASIC’s functions and powers under credit legislation.
While ASIC has discretion as to whether hearings take place privately or publicly, the regulator is required to have regard to whether it is in the public interest for a hearing to take place in public. Under these provisions, ASIC also has power to summon witnesses and require the production of documents for the purposes of a public hearing. It may also refer to a court any questions of law arising at a hearing.
ASIC’s hearings power has been little used to date. However, it appears from the regulator’s latest position that it intends to utilise these public hearings as an aspect of its renewed approach to enforcement in the wake of the Hayne Royal Commission, and in light of its various new penalties and legislative powers.