Regulation 4 of the Australian Securities and Investments Commission Regulations 2001 sets out the approved Form 1 — the formal notice ASIC uses to compel a person to appear for examination or provide reasonable assistance during an investigation.
For many clients, receiving a Regulation 4 Form 1 – s 19 Notice is the first indication that ASIC is formally investigating suspected insider trading or other corporate offences. The notice is highly structured, legally binding, and carries significant penalties if ignored.
This article explains how ASIC investigations start, what a Regulation 4 notice means, and what to expect from the compulsory examination process.
Why ASIC Uses Regulation 4 Notices
Under Regulation 4 of the ASIC Regulations 2001, ASIC must use Form 1 when requiring a person to:
- appear for examination under s 19 of the ASIC Act 2001 (Cth)
- answer questions under oath or affirmation
- give “all reasonable assistance” to an investigation
The uploaded Form 1 explicitly references suspected contraventions of s 1043A (insider trading) under the Corporations Act 2001 (Cth), a common context for compulsory examinations. Not all the forms refer to insider trading depending on the circumstances.
For individuals who have never dealt with ASIC before, the formal and mandatory wording of the Form 1 often comes as a shock.
How an ASIC Matter Typically Starts
An ASIC investigation into potential insider trading, market manipulation, directors’ duties breaches or misconduct may begin from:
- suspicious trading reports from the ASX
- complaints from the public or whistleblowers
- referrals from the AFP, AUSTRAC or other regulators
- irregularities identified through ASIC’s market surveillance systems
- compulsory reporting from auditors or financial service licensees
Once ASIC has reasonable grounds to suspect you hold relevant information, it may escalate the matter from informal inquiries to a compulsory examination under s 19.
The uploaded document confirms this: ASIC states it “suspects or believes you can give information relevant to a matter it is investigating” before issuing the notice.
What a Regulation 4 / s 19 Notice Requires You To Do
The Form 1 requires the recipient to:
- Appear for Examination
You must attend ASIC’s nominated location, date and time, and take an oath or affirmation before answering questions. This is not optional; failing to appear without reasonable excuse is an offence carrying:
- up to 240 penalty units or
- 2 years imprisonment (s 63 of the ASIC Act).
- Give “All Reasonable Assistance”
This may include producing documents, explaining transactions, clarifying timelines, or identifying other individuals involved.
The Inspectors may also give directions about how that assistance must be provided.
Your Rights During an ASIC Examination
Right to legal representation
Under s 23(1), you are entitled to have a lawyer attend, address the examiner and ask clarifying questions.
Right to claim privilege against self-incrimination
You cannot refuse to answer a question because it may incriminate you (s 68(1)).
However — if you state “privilege” before answering — your answer is not admissible against you in criminal proceedings, except for offences relating to false statements.
This is a crucial protection within ASIC’s compulsory examination regime.
Right to Legal Professional Privilege (LPP)
ASIC acknowledges (in the explanatory notes) that LPP is a reasonable excuse not to provide certain information. Extensive procedures exist for claiming privilege over documents or oral statements.
Right to a transcript
If requested, ASIC should provide a written transcript after the examination under s 24.
Your Obligations Under the Notice
The explanatory notes attached to the Form 1 outline several mandatory obligations:
- You must answer questions
Failure to answer without reasonable excuse is an offence.
- You must not give false or misleading information
This carries penalties of up to 600 penalty units or 5 years imprisonment.
This is one of the most serious risks in any ASIC examination.
- You must not obstruct or hinder ASIC
This includes refusing to cooperate or interfering with the investigation.
- You must not destroy or alter documents
Destroying, altering or sending documents interstate or overseas when ASIC is investigating is an offence with penalties up to 5 years imprisonment.
How ASIC Conducts the Examination
Private examination
Under s 22, exams are held in private. You may be directed not to disclose questions or answers to anyone other than your lawyer.
Procedure
- You present identification at ASIC reception
- You take an oath or affirmation
- Two Inspectors usually conduct the examination
- Questions may be highly detailed and technical
- The session may last several hours and may continue over multiple days
The aim is not to ambush you but to obtain reliable evidence relevant to ASIC’s investigation.
Why These Notices Matter in Insider Trading Investigations
ASIC often issues these notices early in insider trading investigations because:
- trading data and phone records are already held by ASIC
- examinations allow ASIC to test explanations
- ASIC must establish what information the person knew, when they knew it, and whether it was generally available
For clients, the examination can be the first moment they understand the seriousness of ASIC’s investigation.
Practical Guidance for Anyone Receiving a Regulation 4 Notice
- The notice is not an accusation, but it is a sign that ASIC is conducting a formal investigation.
- You must comply — penalties for non-compliance are serious.
- Prepare carefully: ASIC often already holds extensive trading data, emails, or documents.
- Do not contact others involved unless your lawyer advises otherwise.
- Understand the privilege process — once you say “privilege,” you must still answer, but the answer is protected.
This is a highly structured statutory process designed to elicit truthful information.
When to Seek Legal Advice
Given the criminal, civil and administrative consequences that may flow from ASIC examinations — including potential insider trading charges, director banning orders, or civil penalty proceedings — many individuals seek advice to:
- understand their obligations
- prepare for the examination
- understand privilege
- review documents ASIC may request
- manage interactions with co-workers or related entities
FAQs About ASIC Investigations and Regulation 4 Notices
What triggers an ASIC investigation?
Suspicious trading, market manipulation concerns, whistleblower reports, or referrals from other agencies commonly trigger investigations.
Is a Regulation 4 Form 1 a charge?
No. It is a compulsory information-gathering tool, not a criminal charge.
Do I have to answer every question?
Yes — unless the information is subject to legal professional privilege. Claims of privilege against self-incrimination must be made using the statutory procedure.
Can my examination answers be used against me?
Not if you properly claim privilege against self-incrimination before answering (s 68). They can be used if the statements are false.
Can ASIC stop me speaking to others?
Yes. Under s 22, ASIC may direct you not to discuss the examination with anyone other than your lawyer.
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