NO.008

REVIEWS OF SANCTIONS IN CORPORATE LAW AND INFRINGEMENT NOTICE PROVISIONS

Today I release a discussion paper reviewing sanctions in the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 (corporate law).

Corporate wrongdoing has the potential to impact on the efficiency and development of the economy, and has repercussions that may be felt by the broader community including employees, creditors, customers and shareholders. The need to provide robust sanctions to deter and punish corporate wrongdoing and protect the integrity of the market also needs to be balanced with promoting the development of a competitive business environment.

The review of sanctions is being conducted as part of a broader strategy to reduce regulatory burden and achieve simpler and more effective regulation.  The purpose of the review is to engage with stakeholders about areas where they see complexity and inconsistency in the current system of sanctions in corporate law. 

One of the issues examined in the paper is whether the expanded use of civil sanctions in corporate law would provide additional options in deterring bad corporate behaviour.

The paper also examines whether higher penalty amounts for civil breaches would better protect consumers and reflect community expectations.

The Government does not have a concluded position on the issues canvassed in the paper.  It is committed to ensuring that regulation strikes a balance between facilitating business efficiency and ensuring that consumers are protected.

I also announce the release of a separate paper, seeking comments on the use and effectiveness of infringement notices issued by the Australian Securities and Investments Commission in preparation for the Government’s review of the notices.

This paper is also part of the drive to improve the operation of corporate law and effective use of sanctions.

Written comments on the issues raised in either paper should be received by 1 June 2007 and may be submitted by mail, fax or email to:

Review of Sanctions for Breaches of Corporate Law

Corporations and Financial Services Division

The Treasury

Langton Crescent

PARKES  ACT  2600

Fax: 02 6263 2770

Email: reviewofsanctions@treasury.gov.au

Please visit www.treasury.gov.au for a copy of these papers.

SYDNEY

5 March 2007

Contact: 

Renae Stoikos – 03 9650 0244