ASIC's paper is the latest step in facilitating the
development of a deep and active retail bond market in
On 20 July 2012, the Australian Securities & Investments
Commission released a
consultation paper outlining proposals to extend its
market integrity rules to the retail trading of Commonwealth
Government Securities (CGS).
The paper represents the latest step in the realisation of the
Australian Government's commitment to facilitate the
development of a deep and active retail bond market in Australia.
It builds on a package of banking reforms announced by the
Government in December 2010 with the aim of promoting a competitive
and sustainable banking system in Australia, including through
allowing retail trading of CGS to provide a more visible pricing
benchmark for retail bonds.
Since the announcement, the Government has taken a number of
steps to facilitate the retail trading of CGS, including the June
2012 introduction of a bill to amend the Commonwealth Inscribed
Stock Act 1911, which provides an overall framework for the
activities of the Australian Office of Financial Management in
issuing, selling and managing CGS. The Bill will also amend the
Corporations Act 2001 to prescribe certain information that
financial advisers must provide when giving advice to retail
investors about CGS.
In view of the Government's wider agenda, ASIC is seeking
feedback not only on the specific proposals outlined in its 20 July
paper for CGS, but also on the potential broader application of
ASIC's market integrity rules to retail corporate bonds.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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