The flowchart depicts the AFRC’s disciplinary process applicable to all regulatees.
The disciplinary process may vary if a regulatee makes a resolution proposal to the AFRC. Please see Cooperation with the AFRC for more information on resolving disciplinary cases with the AFRC by consent.
Upon receiving a case referral, the AFRC will conduct an assessment on the merits of the case and whether disciplinary action against the regulatee is warranted.
Where there is insufficient evidence to proceed, the AFRC will either close the case without commencing any disciplinary action or issue a Compliance Advice Letter to the regulatee.
Where there is sufficient evidence to proceed, the AFRC will consider taking disciplinary action against the regulatee.
If the AFRC decides to commence disciplinary action, an NPDA will be sent to the regulatee concerned.
The NPDA will:
- set out the allegations against the regulatee as well as the relevant facts and evidence;
- state the AFRC’s preliminary views on the allegations and proposed sanctions; and
- enclose a List of Documents relevant to the matters set out in the NPDA.
The regulatee will be given an opportunity to make representations. The regulatee should explain in writing any disagreement with the allegations, facts, preliminary views, or proposed sanctions, with detailed reasons and evidence.
The AFRC will decide on a disciplinary matter in the first instance without a hearing. The AFRC’s decision will be documented, together with reasons, in a written Decision Notice issued to the regulatee.
The regulatee, if aggrieved by the AFRC’s disciplinary decision, may apply to the Accounting and Financial Reporting Review Tribunal (Tribunal) for an independent, de novo review of the decision. Such an application must be made in writing within 21 days beginning on the day after the AFRC has issued the Decision Notice to the regulatee. The application for review must state the grounds for the application.
If a party to a review is dissatisfied with a determination of the Tribunal, an appeal can be made to the Court of Appeal on a question of law and/or fact. The party concerned must first apply to the Court of Appeal for leave to appeal within 30 days after the Tribunal has issued the determination.
Regulatees are encouraged to seek independent legal advice on the matter where appropriate.
Please refer to the Outline of the AFRC’s Disciplinary Process for further details.
Cooperation with the AFRC
The AFRC has the power to take disciplinary action by consent if the AFRC considers it appropriate to do so in the interest of the investing public or in the public interest. Cooperation is a recognised mitigating factor that may justify a reduction in sanctions.
A regulatee may make a resolution proposal to the AFRC at any time during the disciplinary process before the issuance of a Decision Notice. Where a regulatee cooperates with the AFRC and reaches an early resolution, the AFRC may reduce the sanction(s) by up to a maximum of 30%.
Please refer to the Guidance Note on Cooperation with the AFRC for further details on the AFRC’s approach to cooperation during investigations and disciplinary actions.