The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

20 March 2013

Retail Corporate Bonds Legislation

Joint media release with
the Hon Bill Shorten MP
Minister for Employment and Workplace Relations
Minister for Financial Services and Superannuation

The Deputy Prime Minister and Treasurer, Wayne Swan, and Minister for Financial Services and Superannuation, Bill Shorten, have introduced legislation today to further encourage the development of Australia's retail corporate bond market.

The Corporations Amendments (Simple Corporate Bonds and Other Measures) Bill will cut red tape for businesses issuing simple corporate bonds, making it easier to buy and sell these financial products.
Promoting a deep and liquid retail corporate bond market is a key component of the Government's banking reform agenda.

A vibrant retail corporate bond market will put competitive pressure on bank lending rates to business and allow us to harness our national superannuation savings so we can domestically fund more productive investment in our economy and reduce our reliance on offshore wholesale funding markets.

The legislation amends the Corporations Act to:

  • introduce a two-part simple corporate bonds prospectus - the new prospectus reduces the current compliance costs associated with the offer of simple corporate bonds to retail investors both in the first issuance and in subsequent tranches.
  • modify the current director's liability that is attached to the offer of simple corporate bonds and to clarify the defences provided in respect to director's liability that apply to all offers of securities.
  • to allow for simple corporate bonds to be  transferred from the wholesale to the retail market,  in line with the approach adopted for retail trading in CGS, through the introduction of simple corporate bond depository interests.

This is another major milestone in the Government's commitment to secure the long-term safety and sustainability of the Australian financial system.

The Gillard Government is committed to securing the long-term safety and sustainability  of our financial system and boosting our reputation as one of the most attractive investment destinations in the world. This follows the passage of legislation last year to enable the retail trading of Commonwealth Government Securities which provide a benchmark price for mum and dad investors looking to diversify their savings through investments in these corporate bonds.