In a speech, ASIC commissioner John Price said the corporate regulator will be looking into the practices employed in the market to handle confidential information, as a result of the findings of its recently-released Report 393 Handling of confidential information: Briefings and unannounced corporate transactions.
“In recent times, a spotlight has been shone on analyst briefings and whether some listed entities are disclosing material information to analysts before telling the rest of the market,” said Mr Price.
“It is important to note ASIC recognises that analysts, and the work they do, play an important role in helping people make decisions about their investments.”
Mr Price said listed entities should have procedures in place which ensure they do not disclose market-sensitive information in their communications.
“We are considering the type of information that is available to analysts at the time they make a material change in their forecasts or recommendations,” said Mr Price.
“We are looking to ensure that changes in research recommendations are not based on non-public material information.
“If market expectations diverge in a material way from the entity’s internal forecasts, it is not acceptable to conduct selective briefings to try and bring the analysts ‘in line’ with the entity’s views,” Mr Price added.
