A bill improving the technology neutrality of Australia’s corporate law, including allowing electronic signatures and virtual meetings, has passed both houses of Parliament with bipartisan support.
But the government faced criticism for sticking with “watered down” continuous disclosure laws that would have been tightened with a Greens’ amendment to the bill.
The Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023 passed the Senate on Monday, seven months after it passed the lower house and more than a year after its predecessor was introduced by the former government.
The bill means all documents which are required or permitted to be signed under the Corporations Act will be able to be signed electronically or in the usual ‘wet-ink’.
Certain documents will also be able to be sent in electronic form, while requirements to publish notices in newspapers will be replaced with any form ‘accessible to the public and reasonably prominent’.
Treasury regulators like the consumer watchdog will also be able to hold hearings and examinations virtually, and allow more payments to be made electronically.
In response to recommendations of the Australian Law Reform Commission, the bill also cleans up “unwarranted complexity” in Treasury law, makes more administrative amendments, and moves some of the corporate regulator’s matters into primary law.
The bill built on a similar one introduced by the Coalition last year that had lapsed at the end of the last Parliament.
Coalition Senators on Monday backed the new version, ensuring swift passage through the Senate.
The Greens unsuccessfully moved an amendment that would have repealed changes by the Morrison government to Australia’s continuous disclosure laws, purportedly to reduce the risk of opportunistic class actions.
The laws had historically required directors to disclose publicly any information that was not generally available and would be expected to have a material effect on a company’s share price.
Greens Senator Nick McKim said the Coalition changes had “watered down” the law in favour of companies, by making them only liable for breaches if they acted with knowledge, recklessness or negligence.
“That means it’s now easier for companies and directors to get away with failing to provide price-sensitive information to the market. It means it’s now easier for companies and directors to get away with withholding information from or providing misleading information to the market and shareholders,” Senator McKim said on Monday, directly quoting Labor’s argument against the changes in 2021.
Attorney General Mark Dreyfus had also described the changes as “attacking the rights of every shareholder in Australia” in 2021, also citing a survey that showed most directors did not want the changes made permanent.
Despite Labor’s opposition in 2021, the now government did not support Senator McKim’s amendment that would have reversed the Coalition changes.
Labor Senator Malarndirri McCarthy said the government will await the findings of an upcoming statutory review into the changes to continuous disclosure laws “before proceeding with any further change in this area”.
Temporary changes to allow electronic signatures and virtual meetings were introduced during the pandemic but the Morrison government struggled to make the changes permanent.
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