An address by Jillian Segal, Deputy Chair, Australian Securities and Investments Commission, to the Australasian Investor Relations Association, Corporate Disclosure Practices Seminar, Sydney, 20 March 2002.
Introduction
Thank you for inviting me to join you today. I believe it was only seven months ago that our Chairman, David Knott, had the pleasure of launching the Australasian Investor Relations Association (AIRA), and of course, AIRA is now an important stakeholder, which is represented on our Corporate Governance Roundtable Group.
These are certainly interesting times to be discussing disclosure. Regulators all over the world are in the process of addressing whether their disclosure rules are rigorous enough in light of the problems/implications thrown up by recent corporate collapses – such as HIH and One.Tel in Australia, and Enron in the US – and the risks associated with inadequate disclosure. Clearly, we all have a stake in ensuring that the integrity of financial markets is maintained through proper disclosure. Although accounts are a key element of disclosure, in these brief comments I am just going to have time to raise a few matters in relation to prospectus and continuous disclosure, so I will not be able to cover issues associated with accounts, auditors and corporate governance generally.
As we have discussed already today, the Securities and Exchange Commission (SEC), for example, recently (March 4 & 6) convened roundtable discussions to examine proposals for better protecting investors by reforming financial disclosure and auditor oversight. Some of the key issues identified in relation to financial disclosure included:
- what information investors need to make informed investment decisions?
- how financial disclosure could be made more intelligible?
- what information is currently being inadequately conveyed
- what type of information needs to be communicated more quickly, and how this could be accomplished?
Further, President Bush, in his Ten Point Plan, has raised access to 'plain English' and prompt access to critical information as two of his key points. It will, of course, be significant for all of us to monitor developments in the United States. To the extent the disclosure regime is made more rigorous in the United States, regulators and legislatures elsewhere will need to give it careful consideration.