Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the regulatory and other steps that must now take place following the announcement of a proposed corporate transaction involving the ASX and what the key considerations are?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Deakin for this very important question because I do think it is important to update the House on the steps which are set out under Australian law for transactions of this type which involve the ASX. The regulatory process ensures that decisions are always taken in Australia’s national interest and that the market integrity of the ASX will be preserved. A proposal of this type is subject to extensive regulatory consideration under both Australia’s foreign investment policy and the Corporations Act. Australia rigorously applies a national interest test to all proposals for foreign government investment and significant private sector investment. This particularly applies to a proposal of this scale and a proposal of this importance.

The screening process to consider this proposal will be undertaken by the Foreign Investment Review Board in the normal way. FIRB will seek advice from other government agencies, including ASIC and the RBA, as to whether this proposal is contrary to the national interest. The government always has taken—and always will take—these decisions in Australia’s national interest. This is the overriding consideration for foreign investment proposals.

The ASX Ltd is also subject to a 15 per cent ownership limitation under the Corporations Act. An increase beyond this threshold can only occur if a regulation is made allowing this to take place. Any such regulation would be subject to disallowance by this parliament. The transaction also requires regulatory approval from the Australian Securities and Investments Commission as well as an Australian court. As members would be aware, on 1 August 2010 the government transferred supervision of Australia’s financial markets to ASIC. This reform will enhance the integrity of Australia’s financial markets and help promote Australia as a financial services hub in the region.

Australia’s financial regulators put their world-class reputation beyond any doubt during the global financial crisis. Our financial system came through all of that with strength. Australia’s financial system has performed better than any other during the global financial crisis and, of course, the ASX is an important part of our financial systems architecture. So we will continue to consider all transactions with the objective of carefully and methodically building Australia’s reputation as a financial services hub and, as always, we will do this in the national interest. I ask all members in this parliament to do the same.