The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has today released draft legislation cracking down on market offences, such as insider trading.
The Corporations Amendment (No 1) Bill 2010 released today increases the maximum criminal penalties for insider trading and market manipulation and provides the Australian Securities and Investments Commission (ASIC) with stronger powers to be able to detect such offences.
“These changes send a clear message that insider trading and the unlawful manipulation of share prices will not be tolerated,” Mr Bowen said.
“These offences have a negative effect not only on the investors involved, but also on the broader economy. The Government is determined to ensure that Australia’s financial markets are fair and transparent for all investors.”
These changes come amid a post-GFC push to increase market transparency and the confidence in Australian financial markets.
The Bill will:
- increase the criminal penalties that can be imposed for breaches of the insider trading and market manipulation provisions of the Corporations Act 2001;
- allow the Australian Federal Police (AFP) to apply for telecommunications interception warrants in the course of an investigation into these offences; and
- enable ASIC to apply for a search warrant under the Australian Securities and Investments Commission Act 2001 without first having to issue a “notice to produce”, which currently gives offenders a window of opportunity to destroy incriminating material.
“ASIC has been hamstrung in its ability to prove intentional misconduct without access to the sort of direct evidence that can be compelling, such as incriminating statements made in telephone conversations, emails or text messages,” Mr Bowen said.
“These changes will provide ASIC with access to the same sort of evidence already available to the Australian Competition and Consumer Commission, while putting in place appropriate safeguards, such as requiring any interception be conducted by the AFP under a judge-issued warrant.”
Copies of the draft bill can be read here.