asic

Market regulator in full action....

http://news.smh.com.au/breaking-news-business/asic-urges-crack-down-on-info-leakage-20091110-i7b1.html


ASIC urges crack down on info leakageDAVID MCINTYRE
November 10, 2009 - 6:04PM
AAP

Australia's corporate watchdog says companies and financial advisers need to crack down on information leakage that seems to have been happening ahead of capital raisings.

Share price declines ahead of prospective raisings suggested that information was being leaked and used to lower the value of the stock being offered, Australian Securities and Investments Commission commissioner Belinda Gibson said on Tuesday.

This appeared to be mainly the result of lax treatment of confidential information by companies and their financial advisers, she said.

"ASIC thinks there needs to be more work done on how confidential information is handled," Ms Gibson said at a corporate finance conference in Sydney.

"Banks and brokers need to sharpen their practice."

Ms Gibson said ASIC was aiming to release a consultation paper in December on the issue.

ASIC consultations so far had found that the practice of sounding, where financial advisers talk to fund managers and brokers to judge the demand for a company's stock, were lax as there was a culture that assumed everyone would do the right thing.

"There must be formal acknowledgment of confidentiality and "no trade" undertakings before any information is conveyed," Ms Gibson said.

"Soundings should ordinarily be done when the market is closed (and) a trading halt may be necessary.

"It is up to companies to insist proper processes are adopted by their bankers."

© 2009 AAP