Australia: ASIC and market supervision

The date has been set for the transfer to the Australian Securities and Investments Commission of the market supervision role currently performed by the Australian Securities Exchange: 1 August 2010. Further information is available here.

Australia: ASIC's power to continue civil proceedings

The Federal Court of Australia has given judgment in Carey v Australian Securities and Investments Commission (ASIC) [2008] FCA 963, an interesting decision concerning ASIC's powers under Section 50 of the Australian Securities and Investments Commission Act (2001). The case concerned ASIC's decision to take over proceedings for breach of directors' duites commenced by a liquidator. One of the directors against whom proceedings had been brought, Mr Carey, argued that ASIC did not have the power to continue the action under Section 50. The Federal Court agreed, however, as Finkelstein J. observed (para. 6):

...in the circumstances of this case, the answer is somewhat academic. The parties accept that if Mr Carey’s view prevails ASIC can and will simply begin new proceedings in the name of each plaintiff. Moreover, I have pointed out to the parties that in such event, I would, most likely, make an order deeming each step taken in the existing proceedings to have been taken in the new proceedings"

This said, as Prof. Ian Ramsay has noted, there is a clear case for considering whether ASIC should be permitted to take over some proceedings, not least because of the likely cost savings. 

For further information see:

Background | The judgment | ASIC | Federal Court of Australia | 

Australia: the Corporations Amendment (No 1) Bill 2010 - draft published

The Treasury has published a draft of the Corporations Amendment (No 1) Bill 2010: see here. The Bill contains, amongst other things, provisions dealing with access to the register of members, the size of fines imposed for insider dealing and the powers of ASIC.

Australia: shareholder engagement and participation

On June 23, Australia's Parliamentary Joint Committee on Corporations and Financial Services published a report titled Better shareholders – Better company: Shareholder engagement and participation in Australia. The Committee considered several issues including the barriers to effective engagement by shareholders in the governance of companies, the engagement of institutional shareholders and the selection of directors. The report makes many recommendations including:

• ASIC should establish best practice guidelines for company annual general meetings and for clear and concise company reporting.
• The government should investigate an alternative regulatory framework for small incorporated companies and not-for-profit organisations.
• The government should investigate the most appropriate regulatory framework for ensuring that stock lenders retain the voting rights attached to the lent shares.
• The government should amend the Corporations Act to exclude shareholder directors from voting on their own remuneration packages either directly or by directing proxies

The Australian Government has welcomed the report: see here.

Australia: directors' duty to prevent insolvent trading - draft ASIC guidance

The Australian Securities and Investments Commission has published for a comment draft guidance concerning directors' duty to prevent insolvent trading under Section 588G of the Corporations Act (2001): see here (pdf). The guidance identifies the key matters which ASIC considers directors should take into account in meeting the duty as well as explaining those factors which ASIC will consider when determining if there has been a breach of the duty.  

Australia: credit rating agencies - regulatory change

The Australian Securities and Investments Commission has announced changes to the regulation of credit rating agencies, effective from 1 January 2010. See here for further information.