Renovating Regulation: the ALRC’s latest report on corporations and financial services law

William IsdaleDr William Isdale and Christopher Ash, both Senior Legal Officers at the Australian Law Reform Commission, share their insights on the ALRC’s latest report on corporations and financial services law. Christopher Ash


If the law regulating corporations and financial services were a house, it would be a large and disordered one. It would be a share house in which renovations had been made with no thought to overall design, and in which the junk of former tenants linger in every room. A house in need of re-design, and a deep clean.

The ALRC has recently released Interim Report B as part of its Review of the Legislative Framework for Corporations and Financial Services Regulation. The report focuses on the role of legislative design and hierarchy in ensuring that the law is coherent and navigable. If implemented, the ALRC’s proposed renovations would help make this house easier to navigate and inhabit – providing welcome relief to lawyers.

The ALRC is seeking feedback on the proposals and questions in Interim Report B by 30 November 2022.

The problem

Over decades, corporations and financial services legislation has developed in an ad hoc manner. The law as it stands today is the work of many architects, each implementing different plans — often prompted by perceived crises.

This history means the law today does not reflect any single design philosophy. It is disorganised, unwieldy, and difficult to navigate. For example, key legal obligations are scattered across different layers of the legislative hierarchy — the Act, regulations, and other legislative instruments. This makes it hard to locate, understand, and comply with the law.

In the ALRC’s view, an important step in renovating the law would be introducing a more rational legislative design, through a clear legislative hierarchy.

A better (and more navigable) floor plan

All rooms should serve a purpose, and one shouldn’t go looking for the bathtub only to find it in the kitchen. Put differently, a plan as to what goes where, and why, is integral to good design. The ALRC proposes a reformed plan for key financial services legislation, with the law to be located in:

  • the Act;
  • a Scoping Order; and
  • thematically consolidated rules.

Under the ALRC’s proposed model, Parliament would continue to set core policy in the Corporations Act. The Act should establish the broad parameters and key objectives of regulation. It should not be filled with prescriptive detail, as is presently the case.

A Scoping Order would contain exclusions and class exemptions from the Act, and other detail defining the Act’s scope. Currently, these are found in numerous locations, and can be difficult to decipher. The resulting maze — and the onerous expectation it places on readers to ‘piece together’ the law — is inconsistent with the fundamental ideal that the law be findable and knowable. In comparison, a Scoping Order would provide a ‘one-stop shop’.

Finally, prescriptive detail should be housed in thematically consolidated legislative instruments — or ‘rulebooks’. Rulebooks would be readily adaptable to meet the needs of changing circumstances, and organised by topic to ensure their navigability. This would also reduce the number of places a person needs to look to find the relevant law. The content of rulebooks would be consistent with, and controlled by, the core requirements of the Act.

In summary, the ALRC’s proposed model gives effect to a simple principle: it is easier to find things if they are put where you expect them to be. In a tidy house, frequently used appliances are best located on a bench, with crockery and utensils stored in drawers organised by theme or function. It is time to bring the same logic to our legislation.

Finding a home for everything (and keeping it there)

The ALRC’s legislative design proposals are complemented by a range of measures designed to help keep the law in order. Broadly, these relate to:

  • how the legislative hierarchy should be used; and
  • the need for a more general tidying-up of legislation.

How the legislative hierarchy should be used

Increasingly, more law — and more significant laws — appear in delegated legislation made by ministers, government departments, or regulators. Delegated law-making is both necessary and beneficial, but it should be guided by sound principles and subject to appropriate review.

The ALRC proposes that consolidated guidance on using the legislative hierarchy would help legislative designers create better legislation. Improved guidance would help lawmakers determine ‘what goes where’, and how powers to create delegated legislation should be expressed. The ALRC has proposed such guidance, as well as possible improvements for how delegated legislation is made.

Tidying up existing legislation

Our current stock of corporations and financial services legislation needs a deep clean. Countless errors have crept in over time, while spent or redundant laws have accumulated like peeling coats of paint. Existing processes for repealing redundant provisions, or for other forms of legislative ‘tidying-up’, have not kept pace. As Simoes da Silva and Isdale have observed:

Lawyers are understandably scared of opening the cupboards. Things will fall out, or be near impossible to find. We have stuffed things in every nook and cranny for years, only rarely bothering to clean our house out.

The ALRC proposes identifying and repealing spent and redundant provisions. Further, there is a need to fix unclear and incorrect provisions, and various outdated notes and references. These steps should be accompanied by measures designed to prevent the accumulation of such provisions in the future.

There is also a need to make the law simpler in the long-term. An important step to achieving this would be integrating existing ‘notional amendments’ into the text of legislation where possible and removing the need for them in future — as envisaged by the ALRC’s proposed model. Notional amendments introduce significant complexity to the law, because they make changes that are not visible on the face of legislation. This makes the law deeply inaccessible.


Stakeholders have consistently told the ALRC that corporations and financial services legislation needs serious reform to reduce complexity. Interim Report B shows how that could be done, by implementing a consistent legislative design and hierarchy, and by removing legislative detritus. If implemented, the ALRC’s proposals would make our house of corporations and financial services law better for all those required to visit and inhabit it.

To learn more, read the ALRC’s Interim Report B here. The ALRC welcomes submissions in response by 30 November 2022.

Dr William Isdale is a Senior Legal Officer with the Australian Law Reform Commission, and an Adjunct Fellow of the University of Queensland’s School of Law. His PhD on native title compensation was completed at the University of Queensland in 2021 (supervised by Adjunct Professors Jonathan Fulcher and the Hon. Justice Andrew Greenwood of the Federal Court of Australia). He was the winner of the Holt Prize in 2021, and his book ‘Compensation for Native Title’ was published by Federation Press in 2022. Previously he worked as a solicitor at MinterEllison, and as Associate to the Honourable Justice John Dowsett AM on the Federal Court of Australia. Connect with Dr William via LinkedIn.

Christopher Ash joined the Australian Law Reform Commission in November 2020 as a Senior Legal Officer. In this role, he leads research and writing for specific aspects of ALRC Inquiries. Christopher was admitted as a solicitor in 2012 and commenced his career as an associate at the Supreme Court of Queensland. Christopher has worked in private practice in Australia and the United Kingdom, and prior to joining the ALRC worked in legal roles at the Australian Securities and Investments Commission. Christopher holds a Bachelor of Civil Law (Distinction) from the University of Oxford, Bachelors of Arts and Laws (First Class Honours) degrees from the University of Queensland, and a Graduate Diploma of Legal Practice from the College of Law. Connect with Christopher via LinkedIn.