ASIC reports on corporate finance regulation – July to December 2018

ASIC has published its tenth report on the regulation of corporate finance issues. The latest report covers the period from July to December 2018 and provides an update on specific focus areas for the next six months.

Report 612 ASIC regulation of corporate finance: July to December 2018 (REP 612) provides statistical data and includes relevant guidance about ASIC’s regulation of:

  • fundraising transactions
  • mergers and acquisitions
  • experts
  • corporate governance issues.

The report explains the approach ASIC takes in these areas, including the conduct that has caused us to intervene, our response to novel issues seen in transactions during the period, as well as offering insights into future areas of focus.

The report discusses ASIC’s key concerns and expectations regarding financial information presented in prospectuses, on-market buy-backs and expert valuations.

The most common disclosure issue observed during the period involved the inadequate disclosure of business models, and the result of ASIC intervention in these matters was most commonly new or amended disclosure, often after we had extended the exposure period due to concerns with the quality of the disclosure. Companies and their advisers are urged to ensure that fundraising documents are clear, concise and effective or risk delays due to ASIC’s regulatory intervention.

The report also includes case studies of recent matters involving innovative or complex consideration structures in schemes and bids, with practical guidance on how to effectively ensure fairness and equality of treatment between shareholders. ASIC continued to intervene in schemes and bids during the period where there were concerns about fairness and equality, voting intention and other public statements, or the adequacy of corporate governance controls.

ASIC urges companies to proactively consider risks associated with climate change and the potential effects on all aspects of their businesses. The report contains our high-level recommendations for listed companies in this respect. Also highlighted is the important work by the Corporate Governance Taskforce to improve corporate governance practices in large listed entities.

ASIC encourages corporate advisers to attend the bi-annual Corporate Finance Liaison meetings to be held in most capital cities between 26 March and 4 April 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 Finance Liaison meetings page on ASIC’s website.

Download REP 612


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:

  • assesses applications to ASIC 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
  • reviews certain documents lodged with ASIC relating to various corporate transactions
  • promotes good corporate governance.

The team also publishes regulatory guidance, conducts targeted surveillances of identified risk areas and conducts deterrence activities.