By Rachel Waterhouse, CEO, Australian Shareholders’ Association

Monday, 19 August, 2024

It’s been a busy six months for the small team at Australian Shareholders’ Association, and we’ve been keeping our eyes on the issues and challenges facing retail shareholders.

Outside of our company monitoring efforts, our advocacy focus has been on engaging with relevant authorities to create a regulatory landscape that is fit for purpose, guided by the priorities approved by the ASA Policy Committee and informed by the membership.

For the last financial year our key areas of focus have been:

• Balancing Risk and Opportunity in Accessible On-Exchange Investments: We seek an appropriately regulated market that protects investors without limiting their access to suitable investment options aligned with their risk tolerance and financial
• Improving Governance of Companies: We promote practices within company boardrooms that lead to better decision-making and more informed
• Sustainable Retirement Incomes and Superannuation: We advocate for well-considered, consistent policy frameworks that support investment for retirement.

2024 Activities

Here is what we’ve been doing over the last six months. For more detail, our current policy positions and submissions can be found on our website.

A Federal Government review of AGMs

The Assistant Treasurer and Minister for Financial Services, the Hon. Stephen Jones MP, has appointed an independent panel to investigate the laws underpinning how annual general meetings are run.

Titled “A Statutory Review of the Meetings and Documents Amendments”, the inquiry is in direct response to the necessary changes introduced during COVID-19, which altered how companies interact with shareholders, introduced the greater use of technology to conduct virtual meetings, and resulted in the electronic delivery of company documents.

The review panel will consider how these changes have affected the conduct of meetings, including impacts upon shareholder participation, voting rights, flexibility, and costs to the companies. It will also assess the influence of electronic document signing and delivery of meeting-related documents on cost and effectiveness.

ASA has attended a roundtable meeting to discuss these issues, and has submitted a detailed submission, with the greatly appreciated

assistance of members who provided their insights and experiences.

The inquiry’s final report to the Government was delivered by 14 August.

Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023

ASA commented on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023.

In our submission, we reiterated our position that the Federal Government is risking driving funds out of the superannuation sector. The unpredictability of ad hoc superannuation changes creates uncertainty for self-funded retirees and future aspirants, undermining the goal of saving for retirement. These ad hoc changes include:

• the taxation of unrealised gains on any superannuation amount above $3 million;

• the failure to consider the impact of inflation on long-term savings by not indexing the proposed cap; and
• the lack of a transition

The bill was debated in the House of Representatives on 4 July 2024, when it was adjourned to be made an order of the day for the next sitting, which is expected to commence 12 August.

Inquiry into the Wholesale Investor and Wholesale Client Tests

The Federal Government has asked for feedback on the current rules for wholesale investing, with some proposals being floated that may put the rights of Australian retail shareholders at risk.

We have argued that the current income and asset tests should be abolished for all Australians wishing to invest in wholesale opportunities with ASX-listed companies and that more evidence needs to be presented to justify changes in the thresholds or processes underpinning this type of investment.

Many retirees invest in wholesale vehicles to support their self-funded retirements, engaging in a broader range of investments such as hybrid securities and notes. These investors often have significant investing experience.

ASA believes that a financial literacy test is a better measure of knowledge than an income or asset test, as it demonstrates that an investor is aware of the risks.

Consultation on Proposed Fifth Edition of the Corporate Governance Council Principles and Recommendations

As an investor representative member of the working group, ASA has contributed to the 5th Edition of the ASX Corporate Governance Council Principles and Recommendations. As well, we made a submission to the public consultation3.

At the time of seeking comments on the proposed changes, the Council anticipated releasing the final version of the 5th edition in early 2025. The changes are expected to take effect for financial years beginning on or after 1 July 2025, although the application date may be adjusted based on stakeholder consultation.

Make a difference

Each new financial year, ASA reviews and updates its policy positions, based on the need of our community and our progress on the existing priorities.

Through the July annual survey, we asked for input from our membership on the areas that needed addressing.

The survey has now been closed and we are currently reviewing your feedback.