The objective of the Review is to examine the law relating to liability for corporate misstatement and to consider whether the existing statutory regime should be extended to a wider set of circumstances of corporate communication and what would then be an appropriate extension of the right of injured parties to recover losses. We understand that if the Government should introduce further provisions following any recommendations made by this Review, there would be both a period of consultation and a full regulatory impact assessment prior to the introduction of any relevant legislation.
We have made both general remarks and have responded to the individual questions posed via an appendix to this letter. We intend to follow closely further developments in this process.
The ACT’s position is broadly supportive of any attempt to clarify the areas in which individuals or companies have statutory responsibilities in respect of market statements. We do not believe however that there is an overall requirement to extend or ‘gold-plate’ the current liability regime for issuer misstatements. The intention of any disclosure regime should not be to place the regulatory requirements for senior markets on companies resourced to manage junior market disclosures, where they could be considered burdensome.
It would be counter-productive if the alternative - of a reduction in information flow - becomes more appealing to those companies. In the event that there is a move towards extension, we would argue strongly that any such extension for corporate statements should be appropriate to the market investors at whom they are directed such that a ‘one size fits all’ does not become the prevailing position. In the same way as there are clear differences in the general requirements for listing between regulated and un-regulated markets, we would hope to see proportionate treatment in respect of company disclosures.
