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 discuss the Treasury’s release of a proposal paper in relation to a proposed regulatory framework for digital and crypto platforms, and the 2022-23 Annual Report released by the Australian Securities and Investments Commission (ASIC).  We also examine the Federal Court’s decision in Re Mithril Resources Ltd, which contributes to the ongoing string of cases clarifying evidentiary requirements in relation to scheme hearings, and the Federal Court’s ruling that Australia and New Zealand Banking Group Ltd (ANZ) breached its continuous disclosure obligation during a $2.5 billion capital raise conducted in 2015.

In Over the Horizon, we discuss the release of two major publications by the International Monetary Fund (IMF) which provide a challenging forecast for Australia’s economic growth and indicate that global economic conditions are becoming increasingly fragmented.


Treasury releases proposal paper in relation to the regulation of digital and crypto assets.  On 16 October 2023, Treasury released a proposal paper seeking views from interested parties on a proposed regulatory framework to address consumer harms in connection with digital asset platforms.  The proposal paper recommends making crypto exchanges and other digital asset platforms subject to existing Australian financial services laws and requiring platform operators to obtain an Australian Financial Services Licence (AFSL).  Under the proposed framework, digital asset platforms would also need to meet specific obligations that consider the nature of the platforms, such as minimum standards for holding tokens, standards for custody software, and standards for transacting in tokens.  The proposed reforms seek to lift the operational standards of digital asset platforms and reduce the risk of collapses, like the FTX exchange in November 2022.  Feedback on the proposal paper closes on 1 December 2023. The Federal Government intends to provide further opportunity for consultation on draft legislation next year.  See Treasury media release and proposal paper.

ASIC releases 2022-23 Annual Report.  On 13 October 2023, ASIC released its Annual Report for 2022-23.  The report outlines ASIC’s key regulatory and enforcement activities during the financial year, which was aimed at maintaining confidence and integrity in Australia’s financial system.  ASIC continued to proactively target misconduct, commencing over 130 new investigations in 2022-23.  Its enforcement action resulted in 35 criminal convictions and almost $190 million in civil penalties imposed by courts.  Key outcomes included ASIC’s first action in relation to alleged greenwashing in October 2022, the release of a report in April 2023 exposing that major bank customers lost over $550 million in scam losses in the previous year, and the issuance of almost 80 interim orders concerning product design and distribution obligations.  ASIC Chair Mr Joe Longo stated that, going forward, one of his primary objectives is to “transform ASIC into a leading digitally enabled and data-informed regulator and law enforcement agency”, and that the regulator “will continue to work with our stakeholders and financial industry participants to improve conduct and strengthen trust in the system, as well as enforce the law to greatest effect”.  See ASIC media release and 2022-2023 Annual Report.


Federal Court continues to settle evidentiary requirements for schemes of arrangement.  On 5 October 2023, the Federal Court of Australia published the reasons for Derrington J’s decision at the first scheme hearing in relation to the proposed acquisition of Mithril Resources Ltd (ASX:MTH) by Newrange Gold Corp.  Justice Derrington endorsed the approach of Colvin J in Re DDH1 Ltd [2023] FCA 982 (discussed in a previous edition of Boardroom Brief) regarding the Court’s role in the approval process for schemes of arrangement, the pre-approval procedure and the preferred approach to evidence of correspondence between ASIC and the target company.  Justice Derrington further noted that “there has recently been an increased attentiveness to, and criticism of, the supererogatory practices that over time seem to have become part of the “usual approach” to court hearings for schemes of arrangement”, and generally supported the notion raised by Jackman J in Re Vita Group Ltd [2023] FCA 400 (discussed in a previous edition of Boardroom Brief) that these practices are inconsistent with the Court’s objective to resolve matters as quickly, inexpensively and efficiently as possible.  In this context, Derrington J’s endorsement of Colvin J’s summary of the matters to be addressed by submission at the first scheme hearing appears to indicate that the Federal Court is increasingly regarding this summary as a statement of the Court’s approach to first scheme hearings in a manner which is consistent with the general objectives set out in Re Vita Group Ltd.  See Re Mithril Resources Ltd [2023] FCA 1177.

Federal Court rules that ANZ breached its continuous disclosure obligation during $2.5 billion capital raise.  On 16 October 2023, the Federal Court of Australia published the reasons for Moshinsky J’s decision, which ruled that ANZ breached its continuous obligation in 2015 when undertaking a $2.5 billion institutional share placement.  As discussed in a previous edition of Boardroom Brief, ASIC commenced proceedings against ANZ in September 2018 alleging that ANZ failed to notify ASIC that approximately $790 million worth of shares in ANZ were to be acquired by underwriters rather than investors.  Justice Moshinsky concluded that this information was material, accepting ASIC’s contention that, if this information had been properly disclosed, “persons who commonly invest in securities would have held an expectation that the underwriters would promptly dispose of allocated or acquired placement shares, and in so doing place downward pressure on ANZ’s share price”.  His Honour further rejected ANZ’s submission that information released in relation to the book build process would have made participants aware that not all the placement shares had been allocated to existing ANZ shareholders, forcing the joint lead managers to place shares with short sellers or purchase the shares themselves.  Justice Moshinsky stated “it is doubtful that market participants would have deduced, concluded or inferred … that a significant proportion of the [p]lacement shares were to be taken up by the [u]nderwriters”. The Federal Court will  determine penalties at a later date.  See ASIC media release and Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited (No 2) [2023] FCA 1217.


IMF forecasts Australia’s economic growth to remain sluggish alongside variable global recovery.  On 11 October 2023, the IMF unveiled its semi-annual World Economic Outlook publication and its Global Financial Stability Report, which provide a multifaceted global economic review and forecast.  The IMF anticipates a challenging economic outlook for Australia, with GDP growth forecast to plummet from 3.7% in 2022 to 1.2% by 2024, and unemployment set to rise moderately from 3.7% to 4.3% by 2024.  In comparison, global growth is forecast to slow from 3.5% in 2022 to 2.9% in 2024, below the historical average of 3.8%, and the average growth rate of advanced economies is expected to decrease from 2.6% in 2022 to 1.4% in 2024.  The IMF considers that central banks may need to keep monetary policy tighter for longer than is currently priced in markets due to high core inflation, which is only slowly declining.  Further, there are significant economic discrepancies across regions, and a widening divergence of inflation and economic outlook could mark the beginning of the desynchronisation of global monetary policy.  While the global economy continues to recover from the effect of the COVID-19 pandemic and Russia’s invasion of Ukraine, progress remains slow and uneven, and further recent geopolitical conflict threatens to increase geographic fragmentation.  Ultimately, however, the IMF concludes that the likelihood of the global economy making a “soft landing” has increased.  See World Economic Outlook and Global Financial Stability Report.

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