The Australian Securities and Investments Commission (ASIC) yesterday published a series of proposed guidelines on the handling of market rumours.
The proposed guidelines would prohibit the origination of rumours and include a process for attempting to verify them. They would also require financial service licensees to have written rumour policies in place, and to clearly identify rumours as such when passing them on.
ASIC said the “consultation paper”:http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/cp118.pdf/$file/cp118.pdf aims to lift standards of conduct across the marketplace.
“During the recent financial crisis there was much discussion about short selling on the back of negative rumours about an entity,” the regulator said.
ASIC added that investors will lose confidence in the integrity of capital markets if they believe that negative rumours are being spread to affect stock prices.
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