ASIC Disclosure Guidelines Criticised by the ACLA

The Australian Securities and Investments Commissions (ASIC) has published a draft regulatory guide seeking disclosure in any jurisdiction within Australia or overseas of previous criminal convictions for directors and key managers. The Australian Corporate Lawyers Association (ACLA) has responded to this guide by denouncing it as time-consuming and difficult to handle with ‘due diligence.’

ASIC’s chief motivation for these guidelines was to publish such disclosures in all prospectuses to help retail investors assess the risks and returns of an offer of securities and make informed investment decisions before committing  financially.

ACLA has argued that “disclosure of disciplinary action or criminal convictions of any nature” presented clear problems with verifications while the disclosure of involvement with companies that have gone into external administrations for insolvency should confined to no more than 10-year period.

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