Senator Nick Sherry's revelation in this paper yesterday that federal cabinet's decision on stockmarket reform is only weeks awav creates an unfortunate timing issue for ASX Ltd chairman Maurice Newman and chief executive Rob Elstone. ASX's annual meeting is scheduled for September 24 and it's unlikely to be anything like the cosy club meeting once associated with the stock exchange.
Apart from the likely introduction of competing stock exchanges — irritating but unlikely to cause mortal revenue ruptures for ASX — and a probable strengthening of the Australian Securities and Investments Commission's oversight, self-described corporate governance agitator Stephen Mayne will be challenging for a board seat at the AGM. Strangely, rather than allow his candidacy to go the way of his 30 previous attempts, ASX has muscled up.
Mayne was standing on a platform of getting ASX to force Macquarie Group and Babcock & Brown to provide greater disclosure of management agreements. While denying Mayne's claim of waivers granted to the investment groups, ASX slipped out a new guidance note last Friday that indicates it will be taking a tougher line on external related-party management agreements from now on. In particular, ASX wants investors to receive "quality disclosure" about management agreements, and for shareholders to have to approve material changes to them. Existing laws would seem to require these already, although enforcement of many laws has been an ongoing issue.
As this is Mayne's sole platform, it's now redundant — but he can be expected to make the most of the marketing opportunity presented by the implied legitimacy ASX's response has given his campaign. ASX directors standing for re-election are Russell Aboud and Trevor Rowe, both formidable and experienced securities market practitioners who are being overtly supported by ASX. Other ASX directors might have been more vulnerable, but their terms aren't up.
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