Electronic execution, virtual meetings, and continuous disclosure in doubt
The recent expiry of the temporary electronic signing, virtual meeting, and continuous disclosure provisions introduced during COVID has created significant confusion.
Electronic Execution and Meeting Measures
Originally introduced in May 2020 in response to the pandemic, the Electronic Execution and Meeting Measures allow a company to execute documents pursuant to section 127 of the Corporations Act electronically and via counterparts plus conduct virtual AGMs and other meetings (including in relation to registered managed investment schemes).
The Electronic Execution and Meeting Measures expired on 21 March 2021.
Legislation introduced to extend the Electronic and Meeting Measures until 15 September 2021 did not pass the Senate on 18 March 2021. While extending relief on execution of documents and meetings was well supported, debate centred around liability in relation to continuous disclosure. The Senate is not scheduled to consider legislation again until May.
This means the pre-COVID position now applies, resulting in debate about whether electronic signing by companies, execution of counterparts and virtual meetings is possible.
Continuous Disclosure Measures
The Continuous Disclosure Measures were introduced in May 2020, to help companies and their officers to more confidently provide guidance to the market during the COVID-19 pandemic, by introducing a 'state of mind' and 'fault' element into the assessment of liability for beaches of continuous disclosure obligations.
Proceed with caution
It is hoped guidance will be issued urgently. Until then, we recommend you proceed with caution. If you need to understand how this impacts you and what steps you should take then please contact us.
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