A speech by ASIC Commissioner, John Price, delivered at the Chartered Secretaries Australia (CSA) 2012 Annual Conference, 3 December 2012
Introduction
Thank you for the opportunity to speak today about continuous disclosure.
ASIC sees continuous disclosure by listed companies as a bedrock of market integrity. It is essential to two of ASIC’s priorities: fair and efficient markets and confident and informed investors.
A number of recent cases – such as NuFarm, Leighton, James Hardie and, more recently, David Jones and Fortescue – have put continuous disclosure back on the agenda as a talking point for companies and their advisers.
ASIC’s view is that there is, broadly speaking, good compliance with the continuous disclosure regime in Australia.
We take very few actions relative to the number of announcements made, and for far fewer than the market commentators say ‘must’ be breaches.
We understand that continuous disclosure issues can sometimes be very difficult, and judgement calls are required.
For this reason, ASIC welcomes and supports ASX’s release of a substantially rewritten draft Guidance Note 8 Continuous disclosure: Listing Rules 3.1–3.1B (GN 8). ASIC worked closely with ASX on this rewrite.
We are confident that the proposed GN 8 will provide companies with the guidance they need to assist them in complying with their continuous disclosure obligations.
Good continuous disclosure is about preparation and organisation, particularly as we venture deeper into the age of social media and the instantaneous sharing of information.
When continuous disclosure is discussed in Australia, it is often based on the image of directors being caught by surprise by a difficult disclosure decision. This creates the misconception that continuous disclosure is something done on a purely reactive basis and in an hour or so.
The reality is – when problems arise, it is frequently because the right frameworks to comply with continuous disclosure are not in place, rather than directors simply making decisions under pressure.
In my presentation today, I am going to cover a few topics:
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the key messages of proposed GN 8;
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the need to have adequate systems in place;
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how, when and what to disclose; and
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challenging issues we anticipate will arise from consultation; and
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when companies don’t get it right – ASIC’s considerations.