Senate Economics References Committee

Public hearing: Wednesday 8 March 2017

Opening statement from Kate O'Rourke, joint Senior Executive Leader, Corporations, Australian Securities and Investments Commission

Good afternoon Chairman

My name is Kate O'Rourke, joint Senior Executive Leader Corporations and I am pleased to appear before the committee today on behalf of the Australian Securities and Investments Commission.

As you may be aware, ASIC's priorities include:

• Ensuring fair, orderly and transparent markets; and
• Promoting investor and financial consumer trust and confidence.

The quality of market disclosure - periodic disclosure in annual reports, disclosure in transactional documents and continuous disclosure - is crucial to our achievement of these priorities. A key subset of disclosable information is risk disclosure, particularly in annual reports and transaction documents. 

For these reasons, ASIC's regulatory oversight of the capital markets includes oversight of risk disclosure and other disclosure made by companies.  The regulatory tools we use in relation to disclosure issues range from stakeholder engagement, guidance, surveillance and enforcement.  

For example, our guidance in relation to climate risk disclosure is included in our Regulatory Guide 247 (Effective disclosure in an Operating and Financial Review) and in our regular Corporate Finance Reports (e.g., Report 469).  We also issue guidance relevant to specific industries, such as our Info Sheet 214 on forward looking statements by Mining and Resources companies.

ASIC's guidance encourages directors to take a proactive approach to strategy and risk management and highlights risks such as climate risk and sustainability, and other emerging risks such as cyber risk and geopolitical instability. We encourage directors to understand and continually reassess the risks that may be applicable to their business and ask the relevant questions of management.

Chairman, I am now happy to take any questions from committee members.