Letter to the editor - Australian Financial Review, 25 March 2015
Delivery by email: [email protected]
ob体育 is not redefining the concepts of 鈥榓ssociation鈥� and 鈥榬elevant interest鈥� (鈥榦b体育 swings pendulum against investor activism鈥�, AFR, 20 March 2015). Indeed, one of ob体育鈥檚 goals is to encourage investors engaging collectively to pursue good corporate governance.
Compliance issues under the takeover and substantial holding provisions may arise when investors take collective action in relation to an entity. ob体育 is consulting on this issue and welcomes all views as part of the process, but wants to correct misconceptions regarding the intended effect of our proposed updated guidance.
While in some instances it can be clear whether conduct falls within or outside the scope of the law, due to the nature of concepts like 鈥榬elevant agreement鈥� and 鈥榓ssociate鈥�, there can be uncertainty regarding their application to a range of conduct. The examples provided in our proposed guidance are illustrative only and individual circumstances of each case needs to be considered. Potential ob体育 action over misconduct will depend on whether it appears conduct undermines takeover and substantial shareholding disclosure laws, rather than simply for promoting good corporate governance.
Existing laws do not prevent investors acting collectively in certain circumstances and ob体育鈥檚 proposed guidance is simply aimed at helping people understand their existing legal obligations.
John Price
Commissioner, Australian Securities and Investments Commission
Melbourne, Vic
The Australian Financial Review published an AFR-edited version of this letter on 25 March 2015.