Proposed Listing Rule Amendments

9 April 2001

Ms Catherine Officer
National Counsel - Investors & Companies
Australian Stock Exchange Limited
PO Box H224
AUSTRALIA SQUARE NSW 1215

Dear Ms Officer

Proposed Listing Rule Amendments - 1 July 2001

The Group of 100 is pleased to provide comments on the following proposals.

1. Continuous Disclosure

A requirement for an entity's annual report to contain a statement of the main practices and procedures in place for ensuring compliance with listing rules 3.1 and 15.7 during a reporting period. The requirement is modelled on the approach taken in relation to corporate governance issues.

Comment:
Although listed entities would already have written policies and procedures regarding disclosure of information the proposal will not add to quality of information and is likely to result in "boiler-plate" disclosure with no value added.

2. Director Disclosure of Securities Trading

An obligation that an entity must provide information in relation to sales and purchases of securities by a director of an entity in a form prescribed by ASX.

ASX believes that investors have a legitimate interest in knowing details of the holdings and security transactions of listed entities. In order for this information to be useful, it must be up-to-date and readily understandable. ASX proposes that the lodgement period for disclosure of a change in a director's holding under the listing rule requirement be 2 days in line with US practice (compare the existing Corporations Law requirement, which allows 14 days). The obligation would rest with the entity under the Listing Rules, as distinct from the Corporations Law requirement which rests with the director.

Comment:
Shifting from a 14-day disclosure period to a 2-day period is a significant reduction in time. Under the proposals the responsibility is shifted to the company/listed entity and notification of a change in director's interest within two business days is unlikely to be practicable. However, we suggest that a 7 day disclosure period would be a considerable reduction of the present notice period without the practical difficulties of the proposed requirement.

We believe that the disclosure of directors' interests and the obligation to make the disclosure is a matter for the Corporations Law and not the listing rules.

3. Proxies

Deletion from rule 14.11 of the open proxy carve-out for votes cast by a chairman. This means that an entity would not count votes where they have been cast by a chairman personally, pursuant to an open proxy. That is there must be some positive action by the security holder in directing the proxy.

Comment:
This is a significant change to existing practice and we question whether the change is likely to achieve its objective. It is unclear whether the proposals apply where proxies are directed to other than Chairman.

A concern with the proposal is that it appears to be inconsistent with the ongoing relationship between directors and shareholders whereby shareholders rely on directors to act in their interests at all times.

Yours sincerely

Tom Pockett
National President