An Enhanced Statutory Disclosure System

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Corporations and Markets Advisory Committee
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This report was produced by theĀ Corporations and Markets Advisory Committee. View further information about the Committee and it's other publications.

In June 1991 the Federal Attorney-General, Michael Duffy, requested the Companies and Securities Advisory Committee to examine the need for a legislatively-based continuous disclosure regime, and the nature of any such scheme. The Committee was asked to report within 2 months.

In response the Committee has prepared this Report, in four Parts:

Part A outlines the general disclosure requirements imposed by the Corporations Law and the Australian Stock Exchange (ASX) Listing Rules.

Part B discusses the rationale for an enhanced statutory disclosure system. The benefits of the proposed system include the protection of the interests of equity and debt investors, the promotion of efficient management, and a better functioning capital market.

Part C details the specific policy recommendations of the Advisory Committee for improving the quality of disclosure. The Committee's proposalsĀ have three main elements:

  • an affirmative obligation on directors of "disclosing entities" to make a timely disclosure of any "material matter" to ASC and, where application, to the ASX. A draft pro-forma Statement of Material Matter is set out in Annexure 1;
  • a requirement for disclosing entities to lodge detailed half-yearly financial reports; and
  • more comprehensive annual disclosure requirements for disclosing entities and exempt proprietary companies

Part D provide a commentary on various recommendations contained in Part C.