The Financial Markets Authority (FMA) announced it is seeking to clarify the legal position on whether continuous disclosure rules still apply to listed companies that enter voluntary administration.
In a statement, the FMA said it intends to file a case stated procedure, which it says will “provide clarity to the market on this principle.”
“The circumstances surrounding the voluntary administration of CBL Corporation Limited have illustrated the legal complexity of ensuring compliance by a listed Issuer in voluntary administration,” it said.
The regulator acknowledges the case stated procedure will not result in timely information being provided to shareholders of CBL in this instance. FMA will continue to consider other avenues for securing the release of some information for their benefit.
“It will, however, provide greater clarity for voluntary administrators, the FMA, and the market, and set future expectations appropriately,” FMA said.
The FMA detailed that a case stated procedure is a procedure by which the regulator can ask the court for its opinion on a point of law. t is not an action taken against any particular party.
“Continuous Disclosure is an important feature of a fair, orderly, and transparent market,” FMA said. “We consider the information released under continuous disclosure remains important to shareholders even when a listed Issuer is in voluntary administration, as shareholders seek to make assessments of the valuation of their holdings and how they may exercise any other rights they have in relation to those holdings.”
No further comment will be issued at this stage, the regulator added.