The Australian Securities Exchange (ASX) has today released its latest review of disclosure of Directors’ Interest Notices lodged by listed entities.
The review was conducted by ASX Markets Supervision (ASXMS) on all Directors’ Interest Notices lodged between 1 July and 30 September 2008 (Q3 2008). The notices cover a director’s appointment, changes to a director’s interests and ceasing to be a director.
ASXMS completed a similar review of notices lodged between 1 January and 31 March 2008 (Q1 2008).
Of the 4,318 notices lodged during the latest three-month period:- 278 or 6.4% breached the ASX listing rule because of incompleteness or failure to disclose to the market within five business days. This indicates that 93.6% of Q3 notices were lodged correctly and on time.
This is an improvement on Q1 results, where 538 or 13% of the 4,137 notices lodged breached the rule, with 87% in compliance.
Of the 278 Q3 breaches:- 74 (1.7% of total notices lodged) concerned active or ‘on market’ trades by directors;
- 115 (2.7%) also potentially breached the Corporations Act by failing to disclose to the market within 14 calendar days (289 in Q1);
- 30 of these 115 were ‘on market’ trades; and
- All 115 potential breaches of the Corporations Act have been referred to ASIC.
Eric Mayne, Chief Supervision Officer of ASX, said: “Disclosure of directors’ transactions and other interests is primarily a matter of good corporate governance and helps maintain an informed and orderly market. This is particularly important during the current period of market turbulence. Investors have a legitimate interest in this information.
“Failure to properly disclose creates the perception of market misconduct and undermines confidence in market integrity. Directors and listed companies should show leadership and set the best example of complete and timely disclosure.
“Improved compliance during this review, with both the listing rules and Corporations Act, can in part be attributed to ASXMS’s campaign of raising awareness. We reminded all 2,200-plus companies of their disclosure obligations via a Companies Update in June 2008 and we have been seeking explanations where disclosure has been inadequate. During the period, ASXMS sent 154 ‘please explain’ letters to listed entities and released 128 of them to the market.
“ASX will continue to actively monitor the lodgement of Directors’ Interest Notices and take appropriate
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