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Tuesday, 28 May 2013
Page: 4096

Mr SHORTEN (MaribyrnongMinister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (21:25): I present a replacement explanatory memorandum for the Corporations Amendment (Simple Corporate Bonds and Other Measures) Bill 2013. I thank honourable members for their contributions to the debate on this bill. The establishment of a deep and liquid retail corporate bond market in Australia is a key priority for the Gillard government. A well-performing and efficient retail corporate bond market will provide an alternative funding source for Australian companies and increase competitive pressure on lending rates.

The reforms in schedule 1 of the bill reduce the regulatory burden on issuers of corporate bonds, while at the same time ensuring that appropriate standards of consumer protection are maintained. The reforms follow on from the recent reforms that led to the commencement of retail trading of the Australian Government Bonds, AGB, on the ASX on 21 May 2013. They deliver on our commitment to reduce regulatory burdens and barriers for offers of corporate bonds to retail investors. There are clear benefits in growing the size of the retail corporate bond market. For Australians living longer, simple corporate bonds provide an appropriate alternative for managing longevity risk, which is of particular interest to self-managed superannuation fund trustees.

The reforms in schedule 1 enable companies to offer simple corporate bonds by releasing a shorter offer-specific prospectus, as long as they have lodged a base prospectus with ASIC for the purposes of making an offer under the new two-part simple corporate bond market.

In addition to these critical reforms, the bill also facilitates future parallel trading of simple corporate bonds into wholesale and retail markets. In streamlining the disclosure requirements, we will help build investor confidence and establish a strong foundation for future growth.

The other measures in the bill contain a schedule to amend the Corporations Act 2001 to define in law the terms 'financial planner' and 'financial adviser'. The amendments will also make sure we can allow ASIC to take action against property spruikers and other individuals who seek to deceive Australian consumers by holding themselves out as genuine providers of financial product advice when they are actually not.

These reforms are strongly supported by stakeholders in the industry. I commend the legislation to the House.

Question agreed to.

Bill read a second time.