De-risking in response to permanent changes to Australias continuous disclosure laws

Recent significant reforms to Australia's continuous disclosure laws designed to address the increasing cost of obtaining directors and officers (D&O) liability insurance and deter unmeritorious class actions have now been made permanent.

But despite this, concerns about the availability and affordability of D&O insurance continue to linger, and the economic fallout from COVID-19 has materially heightened the risk of securities class actions based on alleged inadequate disclosure. How can listed entities and their officers manage the risks associated with Australia's continuous disclosure and misleading conduct regime?

From 14 August 2021, listed entities and their officers will only be liable for penalty proceedings where they are knowingly involved in a failure to comply with the continuous disclosure obligation (Treasury Laws Amendment (2021 Measures No. 1) Bill amends the Corporations Act 2001). The changes also import the fault element into misleading or