ASIC crackdown on related party transactions and experts' reports

ASIC wants to take a tougher stance on related party transactions. A new policy proposal aims to reduce the use of the arm's length exception and force greater disclosure of related party arrangements in fundraising and takeovers documents.

The proposal follows an ASIC review of related party transactions involving both listed and unlisted companies. ASIC appears to have concluded that too many deals were being approved by boards rather than going to shareholders for approval.

ASIC has put its proposals on the table for discussion, with a view to publishing a final policy in March next year.

It has also proposed revising its existing policies on independent experts' reports. This includes new material on the "fair and reasonable" test.