MARK COLVIN:
The Minister for Corporate Law, Nick Sherry, says the Government will announce changes to the Federal corporate regulatory system in the next month or two.
Senator Sherry was responding to comments from Victorian Premier John Brumby suggesting that greater vigilance by federal regulators might have protected investors in Chartwell Enterprises. The Geelong based company collapsed this week, allegedly owing 80 investors about $70 million.
Samantha Donovan reports.
REPORTER:
The demise of Chartwell Enterprises follows hot on the heels of the Opes Prime and LIFT Capital collapses. The Minister for Corporate Law, Nick Sherry, acknowledges that these crises and the volatile international economy are making the need for change urgent.
NICK SHERRY:
We have identified those issues around disclosure, around state-Commonwealth powers, covered short selling. We've identified those issues and we are acting to change the regulatory oversight in those areas as quickly as is possible.
We know, for example, that the general disclosure documentation that individual investors rely on is simply too complicated. It may as well be written in Latin. And we've begun work on simplification of disclosure documentation, particularly around identifying risk.
We've identified difficulties with state and territories regulation, complexity, overlap, financial services, should be regulated nationally.
REPORTER:
Senator Sherry says further changes to the regulatory system will be announced within the next four to eight weeks.
NICK SHERRY:
Well, we've identified, for example, that the Corporations Act in respect to what is known as covered short selling is deficient and changes to the law will be made there. We've identified, for example, that ASIC in some areas of financial services regulation currently [indistinct] of the states is obviously unable to act, and that's the purpose of seeking the transfer of some state powers on financial services into the Commonwealth jurisdiction. And most of those powers would fall within the remit of ASIC when they are transferred.
REPORTER:
Should ASIC be doing more to provide better communication to investors?
NICK SHERRY:
Well, ASIC have done a solid job in what are very difficult circumstances. I'm not in a position this evening to indicate where change will occur but we've acted decisively in a number of areas to date. And there will be further issues that we will be dealing with an making announcement on in the next short while.
REPORTER:
The collapses of Opes Prime, LIFT Capital, and now Chartwell Enterprises are also turning up the heat on the Australian Securities Exchange. Commonwealth Bank chief executive Ralph Norris this week questioned its dual role as both a market regulator and listed company.
Senator Sherry says that too is being reviewed.
NICK SHERRY:
Well, currently the Government has before it some applications for licensed competition to the ASX and in that context the issue of market supervision has to be examined. And, again, that's an issue once we've concluded our observations and consultation, we will be making an announcement on.
MARK COLVIN:
Senator Nick Sherry, Minister for Corporate Law, ending Samantha Donovan's report.