ASIC reports on corporate finance regulation – January to June 2019September 23, 2019
ASIC reports on corporate finance regulation – January to June 2019
ASIC’s latest report on its oversight of corporate finance activity between January to June 2019 has been published today and includes an update on specific focus areas for the next six months.
Report 630 ASIC regulation of corporate finance: January to June 2019 (REP 630) provides statistical data, and includes relevant guidance, about ASIC’s regulation of:
mergers and acquisitions
corporate governance issues.
The report also discusses key concerns arising from practices in these areas, including the conduct that has caused us to intervene, our response to issues identified in transactions during the period, and offers insights into future areas of focus.
Key observations and recommendations for better practice are summarised below:
We requested additional or amended disclosure in more than a quarter of all prospectuses lodged during the period. Consistent with prior periods, we remain concerned about inadequate or unclear disclosure of business models, use of funds and risks disclosure. There is clearly room for improvement and advisers are urged to keep this in mind when assisting with the preparation of disclosure documents.
We observed an increase in the number of IPOs by technology development and service companies that are relatively early stage and loss making. In many instances, we have sought corrective and additional disclosure in relation to revenue growth and customer numbers which appears to be a considerable focus area in prospectuses for such types of issuers.
Issuers that engage marketers to promote offers are reminded that they should actively monitor marketing and promotional activities and materials to ensure that it is not misleading or deceptive.
Our surveillance of independent expert licensees during the period identified that several experts did not maintain or had inadequate internal documentation of internal processes relating to the preparation of expert reports.
Mergers and acquisitions
On four occasions during the past 12 months, ASIC either withheld no-objection letters or intervened to oppose the approval of a scheme of arrangement. We will closely scrutinise schemes of arrangements involving practices we consider are contrary to the principles underlying the regulation of takeovers and which undermine the integrity of the scheme process.
We recommend that directors who will receive benefits under a scheme consider potential conflicts of interest when considering whether to make a recommendation and carefully disclose such considerations in the scheme documentation.
In addition to matters concerning disclosure and offer structuring, we also identified concerns with practices during transactions that affect the integrity of the markets in which they take place, including matters pertaining to substantial holding disclosure and takeover bid minimum acceptance conditions.
ASIC continues to maintain a focus on climate risk disclosure, and we outline our recent efforts to clarify our policy in relation to the disclosure of risks and opportunities associated with climate-change.
ASIC encourages corporate advisers to attend the bi-annual Corporate Finance Liaison meetings to be held in most capital cities between 25 September and 3 October 2019. Liaison meetings offer an opportunity for ASIC to discuss the content of these reports in greater detail and address issues that have arisen since the reporting period, as well as answer questions from participants. For more information, visit the Corporate Liaison Meeting page on ASIC’s website at https://asic.gov.au/about-asic/what-we-do/how-we-operate/stakeholder-liaison/corporate-finance-liaison-meetings/
Download REP 630 here >>>rep630-published-23-september-2019
ASIC’s Corporations team is responsible for regulating conduct by corporations, with a particular focus on equity fundraising and control transactions.
As part of ASIC’s work, the team:
conducts real time oversight of corporate finance transactions, including control and fundraising transactions
promotes good corporate governance
assesses applications for relief from certain parts of the Corporations Act including the financial reporting provisions in Chapter 2M, the takeovers provisions in Chapter 6, and the fundraising provisions in Chapter 6D.
The team also publishes regulatory guidance, conducts targeted surveillances of identified risk areas and conducts deterrence activities.
Subscribe to our newsletter
- How to deal with COVID-19 in the reporting season July 13, 2020
- financial reporting news and insights June 30, 2020
- End of Year Tax Planning Guide – 2019/20 June 02, 2020
- COVID-19 | Reporting deadlines further extended for listed and unlisted entities May 14, 2020
- COVID-19: Signing contracts electronically just got easier for companies May 06, 2020
- ASIC reports on corporate finance regulation – July to December 2019 April 20, 2020
- JobKeeper Payment has now been legislated by Parliament April 14, 2020
- ASIC to provide additional time for unlisted entity financial reports April 09, 2020
- Coronavirus stimulus package to include jobkeeper payments March 31, 2020
- New ASIC guidelines for upcoming AGMs and financial reporting requirements in light of COVID-19 March 25, 2020
- Initial public offers: Relief for voluntary escrow arrangements and preprospectus communications February 24, 2020
- Financial Services Royal Commission Draft Legislation February 04, 2020
- 2020 IPO Watch Report January 30, 2020
- The execution challenge for a new decade January 21, 2020
- Australian Government delays implementation of Open Banking after facing practical issues with the new Consumer Data Right January 13, 2020
- ASIC reports on corporate insolvencies 2018–19 December 19, 2019
- ASIC Financial reporting focuses for 31 December 2019 December 06, 2019
- ASIC releases report on mining and exploration initial public offers December 05, 2019
- Final ASX listing rules reforms – summary of key changes November 12, 2019
- tokenized securities are the next big megatrend of the blockchain revolution November 06, 2019
- CDR privacy safeguards: OAIC guidance released November 06, 2019
- Financial Services Council releases guide to help stop elder financial abuse October 31, 2019
- Final ASX listing rules reforms October 11, 2019
- ATO celebrates 20-year milestone of regulating self-managed superannuation funds October 10, 2019
- ASIC reports on corporate finance regulation – January to June 2019 September 23, 2019
- Does your SMSF investment strategy meet diversification requirements?’ September 19, 2019
- ASIC’s Corporate Plan 2019-2023 August 28, 2019
- Government announces Hayne Royal Commission implementation timetable August 26, 2019
- Countdown to AGM August 20, 2019
- ASIC enforcement update January to June 2019 August 18, 2019
- ASIC Warns On Insider Trading In Small Cap Miners August 03, 2019
- APRA proposes stronger rules on remuneration August 01, 2019
- AASB 16 Leases – get it right as it may have a large impact on your financial reporting July 19, 2019
- FATF releases 2019 guidance on virtual assets: 9 key points and global changes July 18, 2019
- Major financial reporting changes and other focuses June 17, 2019
- ASIC issues guidance to licensees to protect against share sale fraud June 16, 2019
- ASIC consults on proposals to maintain investor protections by restricting retail offers of ‘stub-equity’ in control transactions June 04, 2019
- ASIC releases market integrity report May 31, 2019
- ASIC updates information for businesses on ICOs and crypto-assets May 30, 2019
- Succession Planning May 14, 2019
- Large proprietary company thresholds increased April 16, 2019
- Australia passes new laws regulating streaming of abhorrent violent material by ISPs and other content providers April 15, 2019
- Federal Budget Review April 03, 2019
- ‘Mind the gap’ – consumers confusing different types of financial advice March 28, 2019
- Accounting and Financial Reporting Standards update March 27, 2019
- ATO & Council of Financial Regulators report on SMSF borrowing arrangements March 22, 2019
- fourth edition of ASX Corporate Governance Council’s Principles and Recommendations officially released. February 27, 2019
- ASIC consults on updating its responsible lending guidance February 14, 2019
- Final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry February 02, 2019
- ASIC reports on 2018 annual general meeting season January 31, 2019
- new mandatory wording requirements for service providers under the Australian Consumer Law January 30, 2019
- Protecting your PPSR Registration from Expiry January 30, 2019
- Findings from 30 June 2018 financial reports January 25, 2019
- Western Australia expands its duty base December 18, 2018
- Australian startup and young technology company funding report 2017/18 December 01, 2018
- proposed changes to the ASX Listing Rules December 01, 2018
- Plans to reduce the financial reporting burden for Australian proprietary companies. November 27, 2018
- The SEC reiterates its position on the issuance, trading and investment in digital assets November 23, 2018
- Three companies combining with a common vision of providing coordinated solutions for unlisted companies November 20, 2018