The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has introduced legislation to stamp out unsolicited, below-value share offers and to crack down on insider trading and market manipulation.
Bowen said the legislation is designed to stop unscrupulous operators from duping vulnerable investors into handing over their shares for well below market prices.
"The Government is determined to ensure that those seeking improper financial gain will no longer be able to gain access to a company's member register to contact unsuspecting investors," Bowen said.
Under the new law, anyone seeking a copy of a member register is required to state their intended use for the information contained, which enables companies to refuse to provide information if it is not sought for a proper purpose.
It will be an offence to provide false or misleading statements, while penalties for market offences, such as insider trading and market manipulation will be increased.
Commenting on the penalties, Bowen said the offences have the potential to seriously undermine the stability and transparency of financial markets, making it essential that the penalties for these offences reflect their potential impact.
"At present, the benefits that can be gained from engaging in such conduct can significantly exceed the current maximum penalty. The Government is significantly increasing these penalties to provide an appropriate level of deterrence," Bowen added.
Both sets of reform are contained in the Corporations Amendment Bill 2010.
