6. Takeovers

6.1 Telephone monitoring during takeover bids

The Corporations Act requires that the bidder and target in a takeover must record all telephone calls they make to holders (other than wholesale holders) to discuss the takeover bid during the bid period. The provisions have been in effect since 11 March 2002. There are detailed requirements in regard to the identification, indexing, storing, destruction, accessing and copying of recordings.

The telephone monitoring of conversations with retail shareholders during takeover bids (and associated indexing and storage requirements) imposes unnecessary costs on business.

The provisions do not appear to have increased the protection available to holders sufficiently to justify the costs they impose. Accordingly, it would be in the interests of market efficiency to remove them. ASIC’s general impression is that access to the scripts (rather than the tape of each phone call) is normally enough and that the provisions create a larger burden than potential regulatory benefits warrant.

As such, it is proposed to consult on removing the requirements in the Corporations Act that relate to telephone monitoring during takeover bids.

Consultation Issue Comments are sought on the regulatory utility of telephone monitoring during takeover bids.

 

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