30 November 2005
Mr Garry Banks
Regulation Task Force
PO Box 282
BELCONNEN ACT 2616
Dear Mr Banks
Regulation Task Force
As indicated in our submission of 22 November 2005, the Group of 100 (G100) is pleased to provide the following additional issues for consideration by the Regulation Task Force. These are:
|1.||Regulatory Approach: The G100 believes that the success of
the 'if not, why not' approach demonstrates the validity of a soft
approach to regulation under which it is better adapted to the
circumstances of each entity rather than mandating compliance with a set
of rules which may not be appropriate for all entities.
|2.||Non-binding shareholder vote: The G100 believes that the
non-binding shareholder vote in respect of director and executive
remuneration is an unnecessary regulatory imposition on companies. The
removal of the requirement does not preclude these issues being raised
by shareholders at the annual general meeting and would remove the need
for introducing formal structures to satisfy the requirement.
|3.||ASIC powers regarding continuous disclosure: The G100
considers that under the Corporations Law ASIC has the power to act as
'judge', jury and executioner' in respect of the imposition of a fines
regime and that this is unacceptable and unfair. We are particularly
concerned at the manner in which ASIC uses these additional powers in
addressing matters with companies and seeking explanation prior to
making a determination. If a fine is imposed, the onus is on the company
to establish that it is not in breach of the requirements. For example,
given the costs and distractions associated with contesting/challenging
ASIC imposed fines a company may, even though it believes it has not
breached the rules, pay the fine to avoid the accompanying distractions.
While it is arguable that sanctions in the form of fines may be required
because it has an immediate impact and can address some of the 'lesser'
breaches of continuous disclosure, the benefits of this proposal are
outweighed by the concentration of power in ASIC and the way in which
that may influence its behaviour.
|4.||Choice of superannuation fund: The introduction of the
superannuation choice has been accompanied by a significant increase in
paper load and reporting including regulatory reporting to APRA. In
particular, there are concerns about the extent of the work necessary to
provide information required by APRA and the associated record-keeping.
Information from members indicates that the number of employees electing
to change funds is completely insignificant.
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