Parliamentary Secretary to the Treasurer, David Bradbury, has welcomed the passage of legislation through Federal Parliament this week that will crack down on improper use of share registers, give ASIC new investigative powers and provide tougher penalties for insider trading and market misconduct.
"These amendments to corporate law will help to improve investor trust and confidence in the integrity of the Australian share market and target misconduct," said Mr Bradbury.
"The amendments crack down on 'low-ball' share purchase scams, where individuals use the personal contact details contained in a company's share register to write to vulnerable shareholders and make an offer to purchase their shares at below-market rates.
"Under the new arrangements, anyone wanting to access a company's share register will have to make an application to that company and state their intended use of the register. A company will have the right to refuse access if the application is considered to be for an improper purpose.
"The nature of improper purposes will be specifically defined in regulations but broadly include unsolicited purchase offers, requests for donations and the gathering of information about a shareholder's personal wealth.
"The amendments will also cover the use of any information from share registers obtained prior to the passing of this legislation.
"The Bill will enable insider trading and market misconduct offences to be better investigated through the use of telephone interception powers exercised by the Australian Federal Police and enhance the existing Australian Securities and Investments Commission's (ASIC) search warrant powers.
"The strengthened investigative powers will be complemented by stronger penalties for serious breaches of market misconduct laws. In the past, the benefit that a person could derive from insider trading has far outweighed the penalties. These amendments now make the penalties commensurate with the seriousness of the crime, including a maximum of 10 years imprisonment for individuals and fines of up to $4.95 million for companies.
"Following recommendations from the Senate Economics Committee, ASIC has agreed to publish information about the use of these search warrant powers in their annual report.
"The Gillard Government is committed to ensuring that our corporate laws provide certainty for companies and shareholders and tough penalties for serious misconduct, and I welcome the passage of this legislation."
19 November 2010