ASIC widens probe into disclosure
The broader focus builds on a surveillance campaign of analyst briefings this coming earnings reporting season in the wake of attention to a series of market briefings by goldminer Newcrest.
Newcrest's relationship with certain analysts has been under scrutiny weeks after the company's share price fell by close to 15 per cent in the 72 hours before the major restructure.
The company has long denied giving "selective briefings" before June 7, a defence that ultimately means the company denies leaking market-sensitive information to preferred analysts.
ASIC has launched an investigation of Newcrest's disclosure performance.
At the same time Newcrest launched its own review, headed by former ASX chairman Maurice Newman.
In a speech on Wednesday night, ASIC commissioner John Price said the "confidential information project" would examine whether tougher penalties or more guidance were warranted. Companies needed more guidance on the rules of how they communicate to the market.
"We will be speaking to accountants, investment banks, brokers and listed companies to understand how they handle confidential information prior to its announcement to the market," Mr Price told a Sydney Australasian Investor Relations Association.
"We think it important to address any perception about there being unfair differences in access to material information in our market."
He said it was essential that listed companies have in place proper systems and procedures for handling confidential information.
"If confidentiality is lost it can have significant implications for the company's disclosure obligations."
Mr Price said ASIC intended to "focus people's attentions on their existing legal obligations", and if the briefings uncovered evidence of "market abuse" the regulator would seek appropriate penalties.
"Let me be clear that the abuse of confidential information is market misconduct," he said. Anyone that trades on confidential information could also be breaking insider trading rules, he added.
But it seems the public outrage that followed the Newcrest saga has already imposed a mood of extreme caution on those employed by ASX-listed companies, and those working in the financial industry.
Several employees of large listed companies have confided to BusinessDay that much higher levels of caution are being taken when arranging interviews and information for public consumption.
Frequently Asked Questions about this Article…
ASIC has widened a probe into market briefings to examine how accountants, investment banks, stockbrokers and listed companies handle confidential information during analyst briefings. The regulator’s "confidential information project" will review whether tougher penalties or clearer guidance are needed around how companies communicate to the market.
Newcrest came under scrutiny after its share price fell by close to 15% in the 72 hours before a major restructure, and questions arose about its relationship with certain analysts. ASIC has launched an investigation into Newcrest’s disclosure performance, and Newcrest has opened its own review led by former ASX chairman Maurice Newman.
The confidential information project will look at how confidential or market‑sensitive information is handled before public announcement, speaking to accountants, investment banks, brokers and listed companies to understand current practices and whether more guidance or tougher penalties are warranted.
Yes. ASIC commissioner John Price said abuse of confidential information is market misconduct and anyone who trades on confidential information could be breaking insider trading rules; the regulator said it would seek appropriate penalties if briefings reveal evidence of market abuse.
The probe is prompting companies to adopt higher levels of caution and to ensure proper systems and procedures for handling confidential information. ASIC has signalled it wants clearer guidance on communication rules, so listed companies may tighten controls around who gets pre‑release information and how interviews are arranged.
Investors should pay attention to analyst briefings and official company announcements, look for unusual share‑price moves ahead of disclosures (as seen in the Newcrest case), and be cautious about acting on any information that hasn’t been publicly released—ASIC is increasing surveillance of analyst briefings this earnings season.
ASIC has made clear it will focus people’s attention on existing legal obligations and will seek appropriate penalties if evidence of market abuse or misuse of confidential information is uncovered. The project will assess whether current penalties and guidance are sufficient.
ASIC plans to speak to accountants, investment banks and brokers to understand how they handle confidential information prior to announcements. These advisers may face greater scrutiny and could be expected to tighten internal controls around what they share and with whom.
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