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Thursday, 17 December 1992
Page: 5334

Senator COLSTON —I direct a question to the Minister representing the Attorney-General. I refer to confirmation by Mr Rodney Adler that his FAI Insurance company purchased Westpac rights to affect the Australian share price index so that FAI could profit from futures linked to that index. Did the Australian Securities Commission undertake an investigation into FAI's purchase of Westpac rights and its subsequent profit from an increase in the share price index? If so, what are the results of that investigation? Finally, is the Australian Government satisfied with a system which allows individuals or companies to manipulate the stock market for their own speculative benefit?

Senator TATE —I have not seen the confirmation which Senator Colston refers to about remarks made by Mr Rodney Adler concerning the involvement of FAI Insurance in purchasing Westpac rights to affect the Australian share price index. I do understand that the Australian Securities Commission, as part of its responsibilities, monitors developments in the securities market. I have been informed that the Australian Securities Commission is aware of the transactions referred to by the honourable senator and is considering the matters raised in the context of those transactions. Naturally, the Australian Securities Commission, as is its proper role as an independent statutory body, will make its investigation without any prejudice or interference from any remarks made either in this chamber or certainly from the Federal Government.

  As to Senator Colston's more general question about whether the Australian Government is satisfied, as he put it, with a system which allows individuals or companies to manipulate the stock market for their own speculative gains, quite clearly, in setting up the Australian Securities Commission and establishing for the first time companies and securities legislation which has a nationwide effect rather than the fragmented federalised system that allowed the speculative excesses of the 1980s to get out of hand and damage Australia's credibility, and certainly the availability of investor moneys through having confidence in the Australian market, whether from domestic sources or from overseas—all that has been remedied by the Commonwealth Government taking very firm steps to establish the Australian Securities Commission in its independent stance.

  I believe that, certainly in relation to insider trading, the various reforms which have been passed by the Senate over the past 12 months or so concerning insider trading make very clear our commitment to a well-regulated market so that insider trading does not occur or, if it does occur, is identified very quickly and action taken to punish those involved.