The government yesterday reintroduced legislation to counter market misconduct and unsolicited share offers in a bid to protect vulnerable investors from unscrupulous operators.
The reintroduction of the Corporations Amendments (No. 1) Bill 2010 cracks down on the practice of unsolicited off-market share offers and also substantially increases the penalties for persons or businesses that breach the market manipulation and insider trading provisions.
"The government has introduced legislation to protect vulnerable investors from unscrupulous operators seeking to obtain their shares," parliamentary secretary to the treasurer David Bradbury said.
"These changes will ensure that the information contained in a member register is not misused by those seeking to target vulnerable investors."
The legislation changes the way information contained in company registers is accessed by requiring someone seeking a copy of the register to state what use they will make of the information contained in the register.
These reforms will prohibit a person from using the information in the register to make unsolicited share offers other than a takeover, solicit members by brokers, solicit members by charities and use the register to gather information about the wealth of individuals.
The legislation will also increase the penalties for market offences, such as insider trading and market manipulation.
As these offences are recognised as being difficult to investigate and prove, the legislation will also improve how they can be investigated through enhancing ASIC's search warrant power and by enabling telecommunications interception material to be collected by agencies such as the Australian Federal Police.
"These increased investigative powers will improve both the investigation and prosecution of these offences," Bradbury said.
