Corporate disclosure a plus for investors
Law firm Slater & Gordon said the changes put forward by the Australian Securities Exchange (ASX) to continuous disclosure would present "a plus" for investors, claiming much of the grey area will be removed.
The ASX, with the help of the Australian Securities and Investments Commission, has proposed a range of changes to continuous disclosure to help listed companies "understand and comply with their continuous disclosure obligations".
The guidance note details what constitutes 'market sensitive' information and explains the meaning of 'false market' and how to use trading halts to manage disclosure issues, among other changes and clarifications.
Principal lawyer in Slater & Gordon's commercial and projects litigation practice, Toby Borgeest, said the law firm ran a number of class actions on behalf of investors who lost money due to corporate breaches of continuous disclosure rules.
"What really matters to investors is that the market receives, in a timely way, significant price-sensitive information," Borgeest said.
"When companies get that badly wrong, they face the prospect of action from regulators and litigation by shareholders."
He added that, while the disclosure standards are necessarily broad, the new changes mean that "some of the grey area is removed".
"Directors can now focus on material issues that require disclosure: they have more guidance as to what information is 'material', and they get more time and space, through greater use of trading halts, to get their disclosures right," Borgeest said.
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