Australian Securities and Investments Commission (Financial Reporting Council – Acting Member) Appointment (No. 1) 2023

Overview

The Australian Securities and Investments Commission (Financial Reporting Council – Acting Member) Appointment (No. 1) 2023 instrument was enacted in 2023 by the Commonwealth Parliament to address a gap in the leadership of the Financial Reporting Council (FRC) as a result of the vacancy created by the impending end of a term of a key member. This notifiable instrument was issued under the authority of the Treasurer, Jim Chalmers, pursuant to subsections 235A(1) and 235AA(6) of the Australian Securities and Investments Commission Act 2001 and subsection 33(4) of the Acts Interpretation Act 1901. The policy objective of this appointment is to ensure continuity in the FRC's oversight of financial reporting standards and practices in Australia, maintaining the integrity of the financial system until a permanent replacement is appointed.

Scope and Application

The Australian Securities and Investments Commission (Financial Reporting Council – Acting Member) Appointment (No. 1) 2023 applies to the appointment of an individual to serve as an acting member of the Financial Reporting Council (FRC) on a part-time basis. Specifically, it pertains to the appointment of Douglas Niven, who is designated to fill this role from 31 July 2023 until the earlier of 31 October 2023 or the appointment of the next Chair of the Auditing and Assurance Standards Board. The Act operates within the jurisdiction of the Commonwealth of Australia, in accordance with the Australian Securities and Investments Commission Act 2001 and the Acts Interpretation Act 1901. This legislative instrument does not specify exclusions, exemptions, or thresholds; instead, it provides a precise timeframe and conditions under which the appointment is valid. The scope and application of this appointment are strictly defined by the parameters set forth in the Act, without any extension or restriction through subordinate instruments.

Key Provisions

The main operative sections of the legislation, F2023N00229, pertain to the appointment of an acting member of the Financial Reporting Council (FRC). Specifically, section 1 of the notifiable instrument appoints Douglas Niven as an acting member of the FRC on a part-time basis, effective from 31 July 2023, until either 31 October 2023 or the appointment of the next Chair of the Auditing and Assurance Standards Board, whichever comes first (section 1(1)(a) and (b)). This appointment is made under subsections 235A(1) and 235AA(6) of the Australian Securities and Investments Commission Act 2001 and subsection 33(4) of the Acts Interpretation Act 1901. The Act imposes several obligations on Douglas Niven as an acting member of the FRC. He must perform his duties in accordance with the provisions of the Act and any relevant regulations. Additionally, he must adhere to the standards and guidelines set by the FRC and ensure compliance with any applicable professional standards and ethical requirements. His role involves participating in the FRC's decision-making processes and contributing to the oversight and regulation of financial reporting and auditing practices within Australia. Breaching the obligations imposed by the Act can lead to various consequences. While specific offences and penalties are not detailed in the notifiable instrument itself, breaches of the Australian Securities and Investments Commission Act 2001 and related regulations can result in significant penalties. For instance, under section 1311 of the Criminal Code Act 1995, a person found guilty of an offence against the Act may face fines up to $210,000 for an individual and $1,050,000 for a body corporate, along with imprisonment terms that vary depending on the severity of the offence. Furthermore, civil actions may be pursued under the Act, leading to orders for pecuniary penalties, compensation, or injunctions. In summary, the legislation appoints Douglas Niven as an acting member of the FRC, outlining the duration and scope of his appointment. It imposes duties on him to act in accordance with the Act and professional standards, while failure to comply can result in substantial penalties under related legislation.