Heard a rumour? Log it!

Holders of Australian Financial Service Licences (AFSLs) will need to maintain a log of all rumours they hear in the market under proposals being put forward for discussion by the Australian Securities and Investments Commission (ASIC).

In a discussion paper released this week, the regulator suggests retaining a log of rumours would have the benefit of raising awareness and encouraging appropriate treatment of rumours.

What is more, ASIC suggests that keeping a log will not dramatically change existing practices or impose an unreasonable compliance burden.

“We believe the benefit of raising awareness about the existence and handling of rumours, by keeping a log, will itself assist in containing the damage to market integrity that can be caused by rumours.

“The log provides a systematic approach to handling rumours and assists ASIC in tracing rumours back through the market to the originators,” the regulator said.

Dealing with the general handling of rumours, ASIC has acknowledged that there will be circumstances where it is reasonable for a rumour to be communicated to another person with the licensee’s office or to its clients.

However, it said the factors that would impact on whether or not to pass on a rumour to the market would include its likely impact, its plausibility and the opportunity afforded to the subject of the rumour to verify it.