The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has today released proposals designed to prevent predatory share offers to vulnerable and unsuspecting shareholders.
These reforms will also reduce the compliance costs for business by reducing the amount of resources needed to respond to requests for copies of member registers.
The Access to Registers and Related Issues proposals paper outlines planned changes to the law, including the requirement that companies only provide access to their share registers when requested for a "proper purpose".
"The Government is moving to stamp out the practice of scam artists using information obtained from share registers to target and rip-off unsuspecting shareholders," Mr Bowen said.
"The proposed changes will balance the needs of those seeking legitimate access to registers with the rights of those whose personal information is contained in the register."
The paper outlines proposals for reform developed from submissions in response to the options paper, Access to Share Registers and the Regulation of Unsolicited Off-market Offers.
Under the Government's proposals, companies will be authorised to refuse requests for access to their share registers unless the request is made for a "proper purpose". Any person seeking a copy of a company's share register would be required to specify in their request the purpose for which the information will be used.
A non-exhaustive list of "improper purposes" will be specified in the Corporations Regulations 2001 and will specifically include the use of a copy of the register for the purpose of making an unsolicited share offer to members of a listed company. Genuine takeover bids will be exempt from the access regime.
The Australian Securities and Investments Commission (ASIC) will also produce guidance material on what purposes can generally be considered proper.
New offences will be established that relate to issues such as improper use of register information and false or misleading applications.
The proper purpose test will not apply to applications to view a share register.
The proposals paper released today also outlines proposals to:
- set down a three‑tiered fee structure for obtaining access to a company's register, with the fee chargeable to be based on the number of members contained in the register;
- require a company to provide an electronic copy of its register in a format prescribed in the Corporations Regulations; and
- reduce the cost burden on companies by allowing a register be viewed on a computer instead of the current obligation of printing a hard copy for applicants who only wish to view the register.
"These proposed technical changes will allow the law to keep pace with changes in technology, while reducing the compliance burden on businesses," Mr Bowen said.
Making a submission
Interested parties are invited to make written submissions.
Please direct submissions to:
Access to Registers Paper
Corporations and Financial Services Division
The Treasury
Langton Crescent
PARKES ACT 2600
Email: accesstoregisters@treasury.gov.au
For a copy of the proposals paper please go to www.treasury.gov.au.
The closing date for submissions is Wednesday 24 February 2010.
3 February 2010