Listed companies have been warned to upgrade their disclosure practices in light of new rules from the Australian Securities Exchange or risk enforcement action from the corporate regulator.
The Australian Securities & Investment Commission said it would take into account the compliance approach of the company when considering the nature and seriousness of potential breaches of the new rules.
"Companies that carefully consider the updated guidance and adopt appropriate processes with the benefit of that guidance can minimise the risk that ASIC will seek to take continuous disclosure enforcement action against them," ASIC commissioner John Price said.
The ASX yesterday published new guidelines for continuous disclosure that responded to feedback from companies and peak bodies about shortcomings in the draft guidance note published last year.
The new note includes tighter measures for how soon a company should disclose market sensitive information to investors and regulators, and when a company should seek a trading halt to release such information.
It also gives guidance on when the ASX treats media and analysts' reports and market rumours as indicating a loss of confidentiality in company information, meaning it should be formally disclosed, and the exchange's expectations about monitoring social media.
Companies are also guided on when to disclose earnings surprises and the role played by consensus broker estimates in setting market expectations.
The ASX and ASIC share the responsibility for regulating the continuous disclosure regime for listed companies.
ASX chief compliance officer Kevin Lewis said the feedback from companies had been important in shaping the final guidance.
"We have done our utmost to address those areas, in consultation with ASX, and believe the final version of the guidance note 8 achieves the right balance between the needs of companies for compliance and certainty and those of investors for timely, meaningful disclosure," Mr Lewis said.
Companies were concerned by earlier suggestions that they should be forced to immediately disclose an approach by a rival bidder during a takeover where the proposal is incomplete or conditional.
Such a "hair trigger" requirement could discourage white-knight bidders and strengthen the hand of the first bidder, the Australian Institute of Company Directors said.
Companies were also worried that creating too broad a disclosure obligation could encourage rumour-mongering.
Law firm Herbert Smith Freehills said companies should not be forced to respond to false rumours and called for the ASX to set out "which types of sources and information a company is not required to monitor".
Fellow law firm Coors Chambers Westgarth had warned that the increasingly fragmented and varied media rumours could be difficult to identify and monitor.
It added that "it is difficult for boards to determine the likely impact of rumours broadcast through new media".
