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GRC Professional : GRC Spring 2012
26 GRC Professional • Spring 2012 Q&A ASX corporate watchdog, Kevin Lewis What do you see as the biggest single compliance challenge for those who you regulate? My constituents basically fall into two groups: listed entities, and the brokers and other pa rticipants who operate in ASX's markets and clearing and settlement facilities. Anecdotally, our listed entities are telling us that they find continuous disclosure the most challenging issue they have to deal with under our listing rules. I am hopeful that our new guidance note on continuous disclosure, which should be released for public consultation later this year, will go a long way towards clearing up some of the uncertainties and controversies in this area. For brokers, I think the main challenge at the moment would be maintaining the compliance skills and resources needed to keep pace with new laws and increased regulatory expectations, in the face of the very difficult economic circumstances currently confronting the industry. The broking industry is in the midst of the perfect storm: a significant reduction in commission revenue, with investors sitting on the sidelines because of all of the uncertainty in global markets, coupled with significant increases in costs coming out of the recent changes to the market structure in Australia. This includes the introduction of an ASIC supervision levy. It also includes some very substantial technology costs in installing a connection to a second market (Chi-X), best order routing technolog y between the two markets, and all the various filters, kill switches and other safety mechanisms that ASIC is rightly insisting on so that we don't see in Australia some of the issues that have occurred overseas because of the complexities of these multi- market links. What lessons can be learned from the Edgar bid for David Jones, the way the company handled disclosure and the way it moved the stock price? I think the real lesson is that markets sometimes over react to takeover speculation and therefore listed entities need to be careful about what they say and when they say it. Kevin Lewis, a lawyer with more than 30 years' experience in areas of financial services, equity capital markets, mergers and acquisitions, joined the ASX as Chief Compliance Officer in July 2010, at the time it transferred market supervision to the corporate regulator, the Australian Securities and Investments Commission. KEVIN LEWIS The Chief Compliance Officer of the ASX, and a speaker at the GRC 2012 conference.
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