Key Point
- An effective continuous disclosure compliance program is
essential if a company and its directors are to avoid
breaching the Corporations Act 2001.
Complying with continuous disclosure obligations is vital
for every Australian Stock Exchange listed company. On top of
being a legal requirement, having in place an adequate
compliance system is an important factor in helping raise a
defence for persons involved in an alleged contravention of
continuous disclosure obligations.
Section 674(2B) of the Corporations Act 2001
provides that the due diligence defence may be successfully
raised when a person involved in the alleged contravention
proves that they took all reasonable steps to ensure that the
company complied with its disclosure obligations, and, after
doing so, believed on reasonable grounds that the company had
complied with those obligations.
