The AICD strongly supports permanent changes to Australia’s continuous disclosure laws introduced by the Bill in line with Corporations (Coronavirus Economic Response) Determination (No. 2) 2020 (Cth) (Determination No.2). We support the permanent introduction of a fault element into continuous disclosure laws and the extension to misleading and deceptive conduct provisions.
These changes will improve the effectiveness of the current securities class action regime whilst discouraging opportunistic claims. They do not in any way change what needs to be disclosed, or by when. There are strong arguments to set a fault threshold on disclosure as proposed by the Bill. The current regime leads to adverse outcomes for Australian businesses and shareholders and is out of step with comparable jurisdictions. The AICD supports robust market disclosure and believes that these amendments should support and encourage entities to provide timely and robust information to investors, including forward-looking statements.
The AICD also supports proposals in the Bill to extend the temporary relief measures for a further six months, allowing companies to hold virtual meetings, such as Annual General Meetings, as well as distribute meeting related materials and validly execute documents electronically. We continue to believe that permanent reform is necessary. In our view, organisations should have the flexibility to adopt the best meeting format for their circumstances, shareholders/members and stakeholders.
However, we consider it is critically important that the legislation is not overly prescriptive and does not create an unnecessary compliance burden for smaller and not-for-profit organisations, given the risk of legislation becoming outdated as technology evolves.
You can read a copy of the AICD submission here.