Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

I rise on behalf of the coalition to speak on the Corporations Amendment (No. 1) Bill 2010, a bill that was introduced into the House just in the last sitting week. In doing so I represent the shadow assistant treasurer, Senator Cormann, in the other place. The coalition, as you know, has taken a long interest in improving Australia’s corporate legal framework. The previous government initiated the consolidation and clarification of Australia’s corporate framework in the 2001 Corporations Act. Of course, also during the period of the Howard government the coalition oversaw the Corporate Law Economic Reform Program, otherwise known as CLERP, which was an ongoing program of reform to further clarify and strengthen Australia’s law in this area.

This bill aims to move Australia further along the road to stronger and clearer law in this important area. In summary, the bill proposes changes in three main areas. Firstly, it will make it more difficult to obtain access to private information kept on company registers. For instance, the measures will require persons seeking a copy of the company register to apply to the company, stating the purpose for which they will use the register. At the moment, anyone can demand a company’s register, which contains shareholders’ names and contact details. This information can be used to target vulnerable shareholders and purchase their shares at significantly below market prices. So the intent of this bill is to make this predatory pricing practice far more difficult.

Secondly, the bill will increase the criminal penalties associated with the breaches of the insider trading and market misconduct provisions in part 7.10 of the Corporations Act. Increasing the maximum fines is designed to further provide a disincentive for individuals and companies to engage in this activity. The maximum fine for individuals found to have breached the provisions will be increased to 4½ thousand penalty units. The maximum term of imprisonment will be increased to 10 years.

Finally, this bill aims to improve ASIC’s ability to detect market offences such as insider trading. The Australian Federal Police, on behalf of ASIC, will have the power to obtain direct evidence of these offences, having obtained a judge issued warrant. The bill will also permit ASIC to apply for a search warrant without first having to issue a notice to produce the material sought by the warrant. The current arrangements provide those under investigation with an opportunity to destroy incriminating material before a search warrant can be issued. The coalition always promoted any active reforms to improve the law in this area and we strongly support the aim of further improving the Corporations Law. In particular, we support the changes in access to company registers. They will not impede commerce, but they will provide a reasonable protection for vulnerable people. We recognise the aims of increasing penalties and powers, but wherever powers are increased it is important, as I am sure you would agree, Mr Deputy Speaker, that there be very strong scrutiny of those.

We note that the Senate Economics Legislation Committee is currently inquiring into this bill. It is due to report on, I think, 16 November. I am sure my friend and colleague opposite the member for Oxley knows the exact date, having spent a lot of time working in this area. We will await the advice, the findings and the evidence of that committee, because increasing powers always requires the level of scrutiny that we wish to see. We leave open the possibility of amendments and the like in this regard. We want to see the work of that committee, but here in this House we do not oppose this bill.

See this speech in context