"When corporate failures have occurred, the courts have dealt with them as appropriate - a process fully supported by ASX and ASIC in their respective co-regulatory roles.
"ASX has effectively overseen a disclosure regime based on the principle of continuous disclosure, to ensure all participants in the market can operate in an efficient and transparent manner. While there will always be room for fine-tuning, we believe Australia's system of market supervision remains the best method.
"In the present climate the Australian Securities and Investments Commission clearly feels under pressure to be seen to take the initiative in certain areas. ASX has lent its support to ASIC's efforts to impose a system of fines for serious breaches of disclosure rules.
"In the area of corporate governance, ASX has relied on boards to discharge their responsibilities under the Corporations Law, and our Listing Rules require boards to disclose their corporate governance arrangements. We are aware there is no universally acknowledged best practice in this area. Nevertheless ASX has sought to provide a lead on this through its Listing Rule guidance notes.
"As we understand it, ASIC would now prefer specific rules introduced to mandate particular corporate governance practices and standards. Of course ASX would support this initiative were it to be incorporated in legislation.
"To attempt to do so though ASX's Listing Rules would mean that such practices or standards could not be enforced through prosecution. If adopting such measures is as important as suggested, then surely they should be enforceable and enforced with regulatory support and sanctions.
"Finally, ASX rejects any suggestion that its supervision of the market is influenced by the fact that it is a listed company. A recent Senate committee conducted an extensive review of this matter last year and concluded that the existing co-regulatory structure was the most appropriate. ASX operates an orderly market, and in so doing relies on the regulator as part of the co-regulatory system to enforce the law."
