On 28 May 2021, the AICD lodged a submission with the Senate Standing Committee on Economics on the provisions of the Treasury Laws Amendment (2021 Measures No.1) Bill 2021 (Bill).
Our submission focuses on the proposed amendments to continuous disclosure laws and proposals to extend the temporary relief measures to enable companies to hold virtual meetings, such as Annual General Meetings (AGM) and distribute meeting related.
The AICD strongly supports permanent changes to Australia’s continuous disclosure laws introduced by the Bill in line with Corporations (Coronavirus Economic Response) Determination (No. 2) 2020 (Cth) (Determination No.2).
These changes will improve the effectiveness of the current securities class action regime whilst discouraging opportunistic claims. They do not in any way change what needs to be disclosed, or by when.
Contrary to some predictions, there has been no evidence that Determination No.2 led to poorer quality disclosures nor a collapse in confidence of our capital markets. High amounts of capital continued to be raised during the duration of the Treasurer’s temporary relief.
There are compelling arguments to set a fault threshold on disclosure as proposed by the Bill. The current regime leads to adverse outcomes for Australian businesses and shareholders and is out of step with comparable jurisdictions.
Virtual meetings and electronic communication of documents
The AICD also supports proposals in the Bill to extend the temporary relief measures to enable companies to hold virtual meetings, such as AGMs, as well as distribute meeting related materials.
Given the effluxion of time since the Bill was introduced and delays associated with the COVID-19 vaccination roll-out, we suggest that the relief measures continue until the end of the 2021 calendar year. We also continue to believe that permanent reform is necessary.
In our view, organisations should have the flexibility to adopt the best meeting format for their circumstances, shareholders/members and stakeholders. However, it is critically important that legislation not be overly prescriptive and create an unnecessary compliance burden for smaller and not-for-profit organisations, given the risk of legislation becoming outdated as technology evolves.
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