Submission to the Regulation Task Force

30 November 2005

Mr Garry Banks
Chair
Regulation Task Force
PO Box 282
BELCONNEN ACT 2616
info@regulationtaskforce.gov.au

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.

Yours sincerely

Tom Honan
National President