The Australian Institute of Company Directors (AICD) has welcomed the extension of continuous disclosure changes which were made due to the economic uncertainty caused by COVID-19.
Today, Treasurer Josh Frydenberg extended the limited temporary relief from continuous disclosure rules until 23 March 2021.
In May, the government temporarily amended the Corporations Act, “so that companies and officers are only liable if there has been knowledge, recklessness or negligence with respect to updates on price sensitive information to the market.” This was due to expire in November.
The AICD had been calling for an extension of this measure due to ongoing uncertainty posed by the COVID-19 pandemic. The government had previously announced the extension of other policy measures including the ability to hold virtual AGMs and relief from insolvent trading requirements.
Treasurer Frydenberg acknowledged today that there is evidence that the continuous disclosure changes have allowed companies to continue to update the market during the COVID-19 pandemic.
AICD CEO and Managing Director, Angus Armour, said, “This is a welcome announcement which will continue to give directors the ability to provide greater disclosure in this uncertain economic environment.
“This limited change is not a watering down of investor protections. Core investor protections remain untouched by the Treasurer's action, as do fundamental directors' duties.
“The AICD continues to be a strong supporter of a robust continuous disclosure regime which is critical to maintaining trust in our listed markets. However, putting the COVID-19 issues aside, long-standing concerns remain that our settings are out of step with global regulatory practice and driving adverse consequences for businesses, shareholders and the economy generally. We look forward to continuing the conversation on permanent reform.”
Media Contact: Maegen Sykes 0439 167 567