Striking the right balance on what can be a fine line
requires sense and skill.
In recent weeks we have seen some quite interesting comments
from ASIC on the subject of "selective disclosure". Of
course some of this is off what has become the cause celebre around
Newcrest and there's no doubt that ASIC is increasing the level
of intensity in terms of its communication with the market about
the importance of market integrity to ordinary consumers and to the
market in general.
And it fits with the theme we've seen the ASIC Commissioner
Greg Metcalf make on a couple of occasions around the importance of
gate keepers. And in that context he looks at gate keepers as being
those individuals who are really monitoring and managing the way
that companies interact with the markets.
In this case we saw Kathy Armour the newest ASIC Commissioner
talking about selective disclosure and the fact that ASIC will be
sitting in on a pretty regular basis on analysts briefings by
Of course this is alleged to be the area where Newcrest got into
trouble when a number of market participants claimed that there was
wider knowledge in the market about their proposed large write-down
than was generally available by virtue of their ASX releases.
The interesting question of course for companies is how you
manage that problem and there's no doubt the companies run down
a very fine line of, do I know enough to make a sensible disclosure
about what's going on in my business and what changes might be
taking place (for example a large write-down or a piece of
litigation that was as yet unresolved), and keeping the market
And there's no doubt that if after the event when you
announce for example a large write-down in the value of an asset
that you will find yourself in the frame from either the plaintiff
bar or alternatively from the regulator.
And I guess the answer for people to think about is that there
is a way through and there is an answer around managing disclosure
and isn't it absolutely the case that there's no contact
between you and analysts or you and the media. – what you
need to do is to be nuanced and careful about what you are doing
and ensure that at all times, although you may be dealing with
levels of details that are underneath the information you provide,
the information essentially reflects that information that you
already have in the market.
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