The Governance Institute of Australia and the Australasian Investor Relations Association (AIRA) have both commended ASIC on adopting a guidance-based approach – as opposed to enacting prescriptive regulation.
ASIC Report 393: Handling of confidential information: Briefings and unannounced corporate transactions is based on a review conducted by the corporate regulator in the second half of 2013.
ASIC staff attended a sample of analyst and investor briefings in August and September 2013 following the release of the relevant entities’ financial results.
“Our primary aim was to increase awareness about the responsibilities of listed entities and briefing participants. We also sought to better understand current market practices,” said the report.
The regulator also conducted an analysis of media reporting in the lead-up to market-sensitive announcements “to determine whether the details of those announcements had already been identified in the media”.
“We did not find any evidence of selective disclosure of confidential, market-sensitive information at the briefings we attended,” said the report.
AIRA chief executive Ian Matheson said decisions about disclosure are central to the day-to-day tasks of investor relations professionals, who are his organisation’s members.
“We see this report as a call to action. Releasing these findings will highlight the need for listed entities and their advisers to have appropriate policies and procedures in place to handle confidentiality and to avoid selective or preferential disclosure of material price-sensitive information which is not in the marketplace at the time,” said Mr Matheson.
“We will encourage our corporate members to ensure that they develop and implement such written policies and practices,” he said.
Governance Institute chief executive Tim Sheehy said relying heavily on advisers to put a lid on market-sensitive information is “not an option” for listed companies.
“Companies own the information, and they need to ensure that their advisers have the necessary processes in place to protect it. It’s not a case of delegated responsibility,” said Mr Sheehy.
“[ASIC’s report] makes it very clear that there are no excuses or extenuating circumstances that can justify the leakage of confidential information by listed entities or their advisers,” he said.
Many of the ASIC report’s recommendations reflect the industry guidelines in the Handling confidential, market-sensitive information: Principles of good practice paper issued by AIRA and the Governance Institute of Australia and updated in 2013.
