The Parliamentary Secretary to the Treasurer, Senator the Hon Ian Campbell, announced today that he intends to move amendments relating to the anti-hawking and insider trading provisions of the Corporations Act.
These provisions were inserted into the Corporations Act by the Financial Services Reform Act and will commence operation on 11 March 2002.
Senator Campbell noted that numerous industry participants had raised significant concerns about how these provisions might impact on their operations since his return to the Treasury portfolio.
"The anti-hawking and insider trading provisions have been of particular concern because of their potential to impact on such a wide range of financial service providers and because they will apply from 11 March 2002," Senator Campbell said.
"The proposed amendments will address the major concerns raised by industry."
Senator Campbell stated that the proposed amendments would clarify the scope of the current restrictions on offers of financial products other than securities and managed investment interests that are contained in section 992A of the Corporations Act.
The amendments would limit the application of the anti-hawking provisions in section 992A to offers made through personal meetings or contact made by telephone.
They would also limit the application of these provisions to offers to retail clients.
"I appreciate the concerns that have been expressed by a broad cross-section of the financial services industry that the anti-hawking provisions as they currently stand may apply far more broadly than is necessary or desirable," Senator Campbell said.
"In the absence of these proposed amendments, it is possible that the provisions may curtail a wide range of legitimate selling practices that have never previously been subject to strict anti-hawking laws."
Senator Campbell also stated that he intended to move amendments to the insider trading provisions that would extend the scope of the current exceptions in sections 1043H to 1043J which relate to a person's knowledge of their own trading activities or intentions.
"The proposed amendments will address industry concerns that these exceptions were drafted too narrowly and did not adequately accommodate the full range of derivative products that will be subject to the insider trading provisions following the commencement of the Financial Services Reform Act.
"They aim to ensure that OTC market makers will not be prevented from managing risk through the use of derivative products due to knowledge of their own trading activities or intentions in relation to underlying financial products," Senator Campbell said.
"In the light of the importance and urgency of these matters, I will seek to move the proposed amendments at the earliest possible opportunity."
Senator Campbell added that he had initiated discussions with the Opposition and other Senate parties on the proposed amendments in the hope of facilitating their passage during the current sittings on a `non-controversial' fast-track.
Senator Campbell will also recommend to the Governor-General that he make regulations under section 1368 of the Corporations Act that will extend the scope of the insider trading exceptions with effect from 11 March 2002.
CANBERRA
22 February 2002
Contact: Tammie Webb, Senator Campbell's Office
08 9325 4227 or 0417 400 227
parlsec.treasurer.gov.au