This is a service specifically targeted at the needs of busy non-executive directors (NEDs).  We aim to give you a ‘heads up’ on the things that matter for NEDs in the week ahead – all in two minutes or less.

In this edition, we examine the effects of new legislation passed to modernise business communications and the recent focus of the Australian Securities and Investments Commission (ASIC) on the distribution of high-risk financial products targeted at retail consumers.  We also discuss the Federal Court’s decision in Re Alloggio Group Ltd (No 2), which further clarifies evidentiary requirements in relation to scheme meetings.

In Over the Horizon, we examine the Federal Government’s commitment to trade and investment in the Southeast Asia region with the release of Invested: Australia’s Southeast Asia Economic Strategy to 2040 at the ASEAN Indo-Pacific Forum in Jakarta, Indonesia.


Bill to modernise business communications passed by both houses of Parliament.  On 4 September 2023, the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023 (Cth) passed both Houses of Parliament.  Once the Bill receives Royal Assent, Australian companies that are subject to the Corporations Act 2001 (Cth) (Corporations Act) will be able to sign a broader range of documents electronically (including various ASIC forms) and hold directors’ meetings virtually without the directors being required to consent to the form of technology being used.  The Bill will also permit companies to send a significant number of documents under the Corporations Act (other than those lodged with ASIC, the Registrar or the Takeovers Panel) either electronically or by hard copy, and introduces relief so that companies are not required to send documents to members where the contact details for those members are known to be incorrect (provided the company has exercised reasonable due diligence).  See the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023 (Cth).  See also our discussion in a previous edition of Boardroom Brief.

ASIC to focus on distribution of high-risk financial products to retail customers.  On 6 September 2023, ASIC announced its intent to address the widespread distribution of high-risk financial products to retail customers, including over-the-counter (OTC) derivatives, contracts for difference and crypto derivatives.  This announcement was released simultaneously with ASIC Report 770 Design and distribution obligations: Retail OTC derivatives (Report 770), which outlines how financial product issuers can improve their compliance with design and distribution obligations.  ASIC Deputy Chair, Ms Karen Chester, stated that “ASIC is disappointed that some high-risk retail product issuers have changed little in response to their design and distribution obligations”.  Report 770 calls on these issuers to address their over-reliance on client questionnaires as a primary distribution filter, review their mass marketing of OTC derivatives, and make greater use of available data to assist the design of derivative products, target market determinations and distribution arrangements.   This announcement indicates that ASIC is adopting a tougher stance in relation to high-risk retail products (as foreshadowed in its 2023-27 Corporate Plan, discussed in a previous edition of Boardroom Brief), and may predicate increased enforcement action in this space.  See ASIC media release


Federal Court clarifies evidentiary requirements in relation to scheme meetings.  On 6 September 2023, the Federal Court of Australia published the reasons for Kennett J’s decision to approve the scheme of arrangement pursuant to which Alloggio Group Ltd (ASX:ALO) (Alloggio) was acquired by Next Capital Pty Ltd.  Justice Kennett agreed with Jackman J’s comments in Re Vita Group Ltd [2023] FCA 623 (discussed in a previous edition of Boardroom Brief) that the Court’s common practice of requesting and considering the evidence of voter turnout for the purpose of assessing the integrity of the scheme process is irrelevant and unnecessary.  However, Kennett J noted that it does not follow that evidence of this kind is wholly irrelevant to the exercise of a judicial discretion, as a very low turnout of members may lead the Court to seek confirmation that the scheme booklet and notice of the meeting had been successfully distributed to members, and that all who wished to vote were able to do so.  Justice Kennett further confirmed that a “streamlined approach” to the presentation of evidence of the distribution of scheme materials to members and the conduct of meetings is to be commended, provided that an inference can be made that all necessary requirements has been complied with.  In the particular circumstances of the case, it was appropriate for Alloggio to rely on a single affidavit of its Chief Financial Officer and Company Secretary.  This is the latest decision in a string of cases clarifying and simplifying evidentiary requirements throughout the scheme process following Re Vita Group Ltd, such as Re DDH1 Limited [2023] FCA 982 (discussed in a previous edition of Boardroom Brief) and Tesserent Limited (First Scheme Hearing) [2023] FCA 969 (also discussed in a previous edition of Boardroom Brief).  Justice Kennett’s decision is a useful reminder that the Court is generally receptive to efforts by parties to reduce the costs incurred, and to “avoid weighing down the Court with unnecessary material”.  See Re Alloggio Group Ltd (No 2) [2023] FCA 1053.


Australia to boost trade and investment in South-East Asia through to 2040 and beyond.  On 6 September 2023, Prime Minister Mr Anthony Albanese unveiled the Federal Government’s strategy for greater trade and investment between Australia and Southeast Asia at the ASEAN Indo-Pacific Forum in Jakarta, Indonesia.  The strategy, titled Invested: Australia’s Southeast Asia Economic Strategy to 2040 (Strategy), was heralded by the Prime Minister as “the most significant upgrade of Australia’s economic engagement with ASEAN for a generation”.  The Strategy notes that the ASEAN region has been one of the fastest-growing global regions in recent years, and focusses on enhancing economic ties across ten priority sectors to capitalise on the region’s predicted ascent to become the world’s fourth largest single market by 2040.  It also highlights the ongoing need for Australian investment in the ASEAN region to catch up with its remarkable economic growth, and identifies key growth sectors such as agriculture, energy security, infrastructure and education and skills.  Aligning with these priorities, the Prime Minister announced that the Federal Government will commit $94.5 million to support three pivotal initiatives: establishing a “Deals Team” in Southeast Asia to support investment opportunities, launching a “Southeast Asia Business Exchange Program” to boost two-way trade, and introducing a new exchange program for young professionals to build enduring business relationships. Taking advantage of the region's extraordinary growth will be critical for Australia as it seeks to "male ASEAN's next half-century event more successful than the last". See DFAT media release.

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