The Parliamentary Joint Committee on Corporations and Financial
Services (the Committee) has recently recommended an amendment to
the Corporations Act which if adopted will limit public access to
the share register of Australian companies. In particular, the
Committee has recommended that section 173 of the Corporations Act
be amended to limit access to the details of shareholders with non
substantial holdings, subject to a 'proper purpose' test
which if met would enable access on certain conditions.
Currently, section 173 of the Corporations Act allows any person
to inspect a company's register of shareholders. The Committee
strongly criticised the provision, arguing that it is contradictory
to Australian privacy laws, and that 'the financially
illiterate have been exposed to predatory share purchase offers,
while shareholders who mistakenly believe the company is complicit
in making the offer may avoid engagement with the company as a
Support for the proposal has been mixed. Chartered Securities
Australia (CSA) has endorsed the Committee's recommendation,
proposing that the Act be amended to allow companies to keep two
separate shareholder registers. One would contain details of all
shareholders and would only be available to other shareholders and
a bidder under a takeover bid. The other register which would be
available to the public would only include the details of those
shareholders with a substantial shareholding ie greater than five
CSA also recommended that a 'proper purpose' test be
introduced, enabling companies to test the bona fides of those
seeking to access the personal details of their shareholders.
Conversely, the Australian Shareholders Association (ASA) has
opposed the Committee's proposal, arguing that rather than
restricting access rights, the solution to the problem is educating
unsophisticated investors about predatory share offers.
It will be interesting to see whether the Committee's
recommendation is ultimately adopted by Parliament and public
access to the share register of Australian companies limited.
1. Parliamentary Joint Committee on Corporations and
Financial Services report: 'Better shareholders - Better
company: Shareholder engagement and participation in
Australia', at para [3.113].
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