The Australian Securities Exchange has released for the first time a comprehensive review of disclosure of director's interest notices, which found 13 per cent of notices were in breach of rules.
The Australian Securities Exchange has released for the first time a comprehensive review of disclosure of director's interest notices, which found 13 per cent of notices were in breach of rules.
Below is the full ASX announcement.
The Australian Securities Exchange (ASX) has today released a review of disclosure of Directors' Interest Notices
lodged by listed entities, including for securities trading by directors during the 'blackout' period.
The review was conducted by ASX Markets Supervision (ASXMS) on all Directors' Interest Notices lodged between 1
January and 31 March 2008.
Of the 4,137 notices lodged during the three-month period, 538 (13%) breached the ASX listing rule requirement to
disclose to the market within five business days. Of these 538 breaches, 289 (7%) also breached the Corporations
Act by failing to disclose to the market within 14 calendar days. Seventy (70) of these were 'active' on market trades
and have been referred to ASIC.
ASXMS also reviewed trading by directors during the 'blackout' period (between the close of a listed entity's financial
period and the release of its half-year or full-year results) for possible contravention of an entity's publicly disclosed
trading policy.
There were 795 trades by directors during the 'blackout' period deemed to be of potential market concern. Fifty-seven
(7%) of the trades may have contravened the trading policies of the entities involved.
Eric Mayne, Chief Supervision Officer of ASX, said: "Investors and other market participants have a legitimate interest in the trading activity of directors. To be useful, this information must be accurate and up-to-date.
"Disclosure of directors' transactions is primarily a matter of good corporate governance, and helps maintain an
informed and orderly market. Failure to properly disclose creates the perception of potential market misconduct and
undermines confidence in the integrity of the market.
"ASXMS has contacted all of the entities whose lodgement of Directors' Interest Notices posed market concerns and reminded them of their compliance obligation under ASX rules. In some cases, ASX's query and an entity's response will be released to the market. In the most serious cases, where the Corporations Act may have been breached or where trading during a 'blackout' period suggests possible insider trading or a failure to meet continuous disclosure obligations, ASX will refer the matter to ASIC for possible investigation and enforcement.
"ASX will continue to actively monitor the lodgement of Directors' Interest Notices and take appropriate supervisory
action for late or incomplete disclosure."
To assist listed entities to understand and comply with the listing rule obligations for Directors' Interest Notices, ASX
has released today a new Companies Update.
ASX also welcomes the publication by ASIC today of a new regulatory guide: Notification of directors' interests in
securities - listed companies. It provides information on how directors should comply with the disclosure requirements of section 205G of the Corporations Act.
