Senator CONROY (6:26 PM) —I move opposition amendment (35) on revised sheet 4216:

1317DAK Publication in relation to statement of reasons

(a) ASIC believes that the disclosing entity has contravened subsection 674(2) or 675(2); and

(b) ASIC has issued a statement of reasons to the disclosing entity; and

(c) the disclosing entity has an opportunity to appear before ASIC at a private hearing in relation to the alleged contravention.

(a) the disclosing entity is not regarded as having contravened the provision specified in the statement; and

(b) that following the outcome of the hearing, ASIC may issue an infringement notice or may choose not to issue an infringement notice in relation to the alleged contravention.

One of the most controversial aspects of the CLERP 9 bill is the power granted to ASIC to issue infringement notices in relation to breaches of the continuous disclosure regime. Labor supports this power. We see it as a mechanism to enhance ASIC's regulatory tool kit. We believe that presently ASIC does not have sufficient regulatory tools at its disposal to effectively enforce the continuous disclosure regime. In March of last year ASIC reached a $100,000 settlement with AMP following an investigation by ASIC in relation to AMP's disclosures to the market during 2002. ASIC said that if a fining regime had been in place then a $100,000 fine would have been appropriate but, as there was no power to levy a fine, AMP agreed to make a community education contribution of $100,000 as a substitute.

In Australia, companies are quick to disclose the good news and slow to disclose the bad, so it is time ASIC had the teeth it needs to enforce the continuous disclosure regime. However, ASIC is prevented from disclosing to the market that it has issued an infringement notice and is prevented from disclosing to the market that it is investigating a breach of the continuous disclosure regime. The quite ludicrous proposition being put forward here is that ASIC is going to be guilty of breaching continuous disclosure laws because it is not going to tell the market of a material fact.

In Labor's view this is market relevant information. Accordingly, we believe that the market should know if ASIC is investigating an alleged breach. That is why we are moving an amendment which gives ASIC the power to disclose to the market that it has issued a statement of reasons and that the company has an opportunity to appear before ASIC at a private hearing in relation to the alleged contravention. This is not a requirement; it is an option for ASIC to use in circumstances where it believes the market should be informed about the alleged contravention.

We have also built safeguards into the amendment. If ASIC chooses to publicise the fact that it has issued a statement of reasons then ASIC is also required to include in the publication a statement that the company has not contravened the provision and that, following the outcome of the hearing, ASIC may choose not to issue an infringement notice. We want to get the balance right. We want to ensure that companies are not put on show trial, but it is clear that if ASIC is conducting an investigation of a corporation it is a market-sensitive issue and should be disclosed to the market so that shareholders can respond accordingly.

Sitting suspended from 6.30 p.m. to 7.30 p.m.

Progress reported.