Then Minister for Superannuation and Corporate Law Senator Nick Sherry has released a paper for industry consultation on the regulation and disclosure of equity derivatives.
The launch of the paper, entitled ‘Improving Australia's Framework for Disclosure of Equity Derivative Products’, follows an earlier pledge by Prime Minister Kevin Rudd to boost the transparency of equity derivative trading and disclosure.
“There has been market concern that there is a lack of appropriate disclosure framework covering equity derivatives, which has reduced transparency of ownership changes and takeover moves.
“This has reduced the ability of companies to know who their effective owners are, and enabled hedge funds to outflank traditional institutional investors by using economic interests to influence companies,” Sherry said.
The proposals in the paper will take place in “close conjunction with international partners”, Sherry added.
“This will also ensure that Australia's regulatory regime does not impose an undue burden on market participants or inappropriate barriers to foreign equity investment in the Australian market.”