9 August 2006
The ACT welcomes the opportunity to comment on this matter. Contact details are
provided at the end of this document. This document is on the record and may be freely quoted or reproduced with acknowledgement.
In the ACT’s June 2006 response to the FSA’s March 2006 consultation CP 06/4 Implementation of the Transparency Directive, we expressed our belief that there was no absolute requirement in the Transparency Directive to create a liability regime to compensate investors and that liability for any non compliance to a regulatory body and system of fines would be sufficient.1 We were aware that this view was held by a minority of the legal practices.
Given that the Companies Bill ended up creating a statutory liability to compensate investors we welcomed the fact that there were to be limitations in the circumstances when compensation is due. The end result will be helpful in limiting the number of vexatious claims that might arise, and in encouraging companies to be open in their disclosures rather than drafting them defensively.
