ASIC talks on listed entity disclosure
Listed entities should prioritise continuous disclosure obligations over any other stakeholder engagement goals, Australian Securities and Investments Commission (ASIC) Commissioner John Price said.
In a speech to the Australasian Investor Relations Association on Tuesday, Price stressed the importance of listed entities not only having procedures which guarantee they do not reveal market-sensitive information in their communications, but following through on these policies.
"A particular issue of concern for ASIC is the temptation that listed entities may have to manage broker consensus or market expectations through selective analyst briefings," Price said.
"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."
Rather, the entity should make a market announcement, he said.
Price said listed entities and their investor relations professionals should make briefings public as soon as possible through webcasts, podcasts and transcripts.
He also noted most small-to-medium mid-market capitalisation entities relied on advisers to handle confidential information about their unannounced corporate transactions.
But he pointed out the inherent risks associated with this, especially when the interests of the two parties do not align.
"For example, we were concerned by the timing and number of soundings conducted by underwriters in a live market before either the announcement of the transaction or a trading halt being requested. This is a significant risk area for leaks and insider trading," he said.
Price said entities should enquire with advisers as to what procedures are in place to protect information confidentiality, adding they should ensure confidentiality agreements or something similar are put in place with advisers or other service providers.
He also said entities should have discussions with underwriters about the number and timing of soundings needed before the announcement of the transaction.
"Query why the sounding can't be conducted the night before the announcement of the transaction," he said.
AUTHOR
Malavika Santhebennur
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
