Independent Review – Department of the Treasury
On 17 February 2021, the Government introduced legislation to make permanent changes to Australia’s continuous disclosure laws. Specifically, the Bill amends the Corporations Act 2001 so that companies and their officers will only be liable for civil penalty proceedings in respect of continuous disclosure obligations where they have acted with “knowledge, recklessness or negligence”. In addition, companies and their officers are not liable for misleading and deceptive conduct in circumstances where the continuous disclosure obligations have been contravened unless the requisite “fault” element is also proven.
Consistent with the Government’s Regulation Impact Statement (RIS) requirements, the Treasury has certified the Parliamentary Joint Committee on Corporations and Financial Services Litigation funding and the regulation of the class action industry Report along with accompanying supplementary analysis, as meeting the requirements of a RIS.
The Office of Best Practice Regulation (OBPR) does not assess the quality of independent reviews and RIS-like documents used in lieu of a RIS, but does assess whether the options analysed in the independent review are relevant to the regulatory proposal. The OBPR assessed that the options analysed in the independent review were not sufficiently relevant to the regulatory proposal and required additional supplementary analysis. The supplementary analysis prepared by the Treasury addresses the gap in the analysis between the certified independent review and the Government’s consideration of options for introducing a fault element to continuous disclosure.
The Treasury has estimated average annual regulatory cost savings of $912.5 million.
Please note: any accessibility requirements should be directed to the Treasury.