International Law

The Minister for Superannuation and Corporate Law has released for public consultation an options paper: Access to Share Registers and the Regulation of Unsolicited Off Market Offers.

The paper puts forward a range of options to address the continuing practice by some entities of making undervalued, unsolicited off market share offers to shareholders of publicly listed companies especially where the offer involves instalment payments.

The paper also proposes reform options to significantly change the rules around access to share registers.

The reform options for addressing issues on share register access include:

• implementing a proper purpose test for access to a register;
• replacing the current "marginal cost" fee arrangement with either a reasonable cost, full cost, market cost, negotiated cost, a prescribed fee based on the takeovers access prescribed fee, or a combination of these; and
• modernising the rules around the format of share registers.

The reform options for boosting consumer protection of listed company shareholders include:

• introducing a cooling off period of between 1-3 months for the accepting shareholder to withdraw from the contract or acceptance document before it becomes binding;
• including a warning statement in offer documents like the health warnings on cigarettes;
• put in place a pre-emptive right to be given to companies to intervene in sales of their shares that do not reflect the market value of the shares; and
• establish a "do not contact" register.

The Government is seeking submissions on the options paper by close of business 24 July 2009.