ASIC takes "no action" stance on AGMs due to coronavirus threat

ASIC takes "no action" stance on AGMs due to coronavirus threat | Insurance Business

ASIC takes "no action" stance on AGMs due to coronavirus threat

The Australian Securities and Investments Commission (ASIC) has released guidelines for meeting upcoming annual general meeting (AGM) and financial reporting requirements, in light of the ongoing coronavirus (COVID-19) threat.

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For listed and unlisted public companies with December 31 balance dates that are required to hold an AGM by May 31, ASIC said it will take no action in case they postpone their AGMs until the end of July, in consideration of the difficulties these entities may be facing due to the restrictions on large gatherings, travel restrictions, and concerns from members about attending large-group meetings in the COVID-19 situation.

The corporate regulator said it also supports the use of appropriate technology for holding AGMs. Firms may opt to hold a “hybrid” AGM (where there is a physical location and online facilities) or a “virtual” AGM (that is conducted solely online) by May 31 or during the two-month extension period, to comply with COVID-19 restrictions.

For entities wishing to push through with virtual and hybrid AGMs, they were advised to check whether their constitution allows such meetings and to provide supplementary instructions to their members electronically, on their website, and via market announcements.

In the case of virtual AGMs, ASIC said there is some doubt if these are permitted by the Corporations Act, but that it would take a no action position on non-compliance with provisions of the Corporations Act that may restrict the holding of virtual AGMs during the period. This is conditional on the technology providing members as a whole reasonable opportunity to ask questions of the auditor and about management and vote by a poll rather than a show of hands.

“Consistent with the Council of Financial Regulators’ statement that they would move to adjust the timing of regulatory initiatives so financial institutions could concentrate on their businesses and assist their customers, we will focus on helping entities with the difficulties created by this situation,” said John Price, ASIC commissioner. “Our position is under continuous review. We are liaising closely with advisors and industry bodies so that we can understand our stakeholders’ needs and respond proactively.”

ASIC said it currently finds no widespread indications of any significant issues for entities in meeting their full-year and half-year financial reporting obligations at Dec. 31, 2019.

For more details about these guidelines, visit the ASIC website.