ASIC updates guidance


The Australian Securities and Investments Commission (ASIC) has released updated regulatory guidance for investors to help them in taking collective action to improve the corporate governance of listed entities.

The guidance – which follows ASIC consultation launched in February 2015 – has been published as Regulatory Guide 128 Collective action by investors (RG 128).

RG 128 includes:

  • Illustrative examples of conduct which is unlikely or more likely to trigger the takeover and substantial holding provisions.
  • An outline of ASIC’s approach to enforcement of these provisions in the context of collective action by investors, which includes considering whether the conduct is control-seeking, rather than simply promoting good corporate governance.
  • An overview of some other legal and regulatory issues that can arise in relation to investor engagement.

As part of this policy update, ASIC has also discontinued class order relief that facilitated voting agreements between institutional investors as it does not reflect the way institutional investors tend to engage with entities and has not been used for many years.

Commenting on the updated guidance, ASIC commissioner John Price said: “Effective investor engagement forms the foundation of good corporate governance and can enhance the long term value of companies.

“Our guidance details how investors can effectively influence the corporate governance of the companies in which they have invested collectively without contravening the principles underlying takeovers and substantial holding provisions of the law.”

To learn more about the AICD’s position on this issue, read our policy submission.