The Australian Institute of Company Directors (AICD) has welcomed the Government’s announcement today that there will be permanent changes to Australia’s continuous disclosure laws.
In December, the AICD backed calls by a Parliamentary Joint Committee for substantial reform to Australia’s securities class action settings, including the permanent re-introduction of a fault element in continuous disclosure laws.
Today, Treasurer Josh Frydenberg announced that the Government will amend the Corporations Act 2001 “so companies and their officers will only be liable for civil penalty proceedings in respect of continuous disclosure obligations where they have acted with “knowledge, recklessness or negligence”.
AICD Managing Director and CEO, Angus Armour, said, “The AICD welcomes the Treasurer’s announcement today which comes when encouraging investment and risk-taking is crucial to Australia’s economic future.
“Australia’s securities class action settings have been out of step with the rest of the world, making us a lucrative market for litigation funders and driving adverse consequences for businesses, shareholders and the economy generally.
“The amendments announced today will discourage opportunistic securities class actions which were being driven by funders’ returns rather than the interests of claimants.
“These changes do not ‘water down’ disclosure requirements. The reckless or negligent director, and the individual who knew that disclosing information would affect the share price and said nothing, is still on the hook as they should be. The quality of disclosures has not decreased as a result of the Treasurer’s temporary relief and this permanent measure will put us on equal footing with other nations”.
Media Contact: Maegen Sykes 0439 167 567