Continuous Disclosure Obligations
Under continuous disclosure laws, CSR must immediately notify the Australian Securities Exchange (ASX) of market sensitive information (unless certain exceptions apply). The ASX requires that the share market is kept continuously informed of such sensitive information.
Failure to notify the share market can be a serious criminal offence, exposing the company, its managers and Directors to imprisonment, fines and damages.
Market sensitive information is knowledge that a reasonable person would expect to have a material effect on the price or value of CSR's securities. The financial impact of the information on CSR is important, but strategic and other implications can be equally important in determining whether information is market sensitive.
Listing Rule 3.1 requires CSR to notify the ASX immediately if it has, or becomes aware of, any information concerning CSR that a reasonable person would expect to have a material effect on the price or value of CSR's securities.
Disclosure under LR 3.1 is not required if:
- a reasonable person would not expect the information to be disclosed; and
- the information is confidential and ASX has not formed the view that the information has ceased to be confidential; and
- one or more of the following applies:
- it would be a breach of a law to disclose the information;
- the information concerns an incomplete proposal or negotiation;
- the information comprises matters of supposition or is insufficiently definite to warrant disclosure;
- the information is generated for the internal management purposes of CSR; or
- the information is a trade secret.
All three of those elements must be satisfied, before the exception applies.
Management of Disclosure Obligations at CSR
The Board requires Management to ensure the Board is kept informed of matters the Board needs to be involved in regarding disclosure.
The CSR Corporate Governance and Disclosure Committee meets as frequently as needed to (among other things) determine whether there are matters that require disclosure to the ASX. The Managing Director's authorisation must be given in any decision relating to disclosure.
Members of CSR's Corporate Governance and Disclosure Committee are the:
- Managing Director;
- Chief Financial Officer;
- Company Secretary (who is primarily responsible for ASX communication); and
- General Manager Investor Relations.
The Disclosure Committee will ensure that the Chairman and Board are involved in all relevant disclosure matters.
The Company Secretary provides regular reports to the Board on the matters which have been (and are currently being) considered for Disclosure by the Committee.
The General Manager Investor Relations closely monitors the consensus of analysts' forecasts of CSR profit performance to determine whether an announcement to the ASX may be necessary to correct a misunderstanding of the Company's prospects. Where appropriate, feedback will be given to analysts if they have made factual errors or wrong assumptions based on publicly available information. Information on market forecasts is provided regularly to the Board.
All CSR people are required to:
- consider whether any information, transaction or event of which they are aware may be market sensitive;
- immediately advise a member of the Corporate Governance and Disclosure Committee of any issues which could develop into market sensitive information (for example, a dispute which could lead to significant legal action or the termination of a major contract). The Committee must be kept informed of any developments; the developing potential issue must continue to be included in monthly reports to the Managing Director until the issue is either resolved or notified to the ASX;
- immediately inform a member of the Corporate Governance and Disclosure Committee of any information that they believe may be market sensitive; if any employee is in doubt about whether information requires disclosure, they should pass it on.
- ensure that the information is not disclosed to anyone outside CSR before the ASX is notified. CSR people may only review the issue with Company colleagues (or CSR's professional advisers) who need to know about it to do their job properly. CSR people may be committing a criminal offence by passing on the information to outsiders; and
- immediately advise a member of the Corporate Governance and Disclosure Committee if the ASX has not been told about market sensitive information and it is discovered that outsiders know about the information.
Process for disclosure
All employees are responsible for informaing the Corporate Governance and Disclosure Committee of any issues which could be market sensitive;
The Corporate Governance and Disclosure will assess any issues referred to it and determine whether it is disclosable, in accordance with CSR's continuous disclosure obligations. This will also involve a consideration of whether it is necessary and appropriate to request a trading halt from the ASX;
Where appropriate, the Board and/or the Chairman will be involved in the assessment and any decision to disclose the issue to the market;
The Company Secretary will begin preparing a draft announcement, ensuring that the announcement is compliant with applicable listing rules (in particular the requirements of Chapter 5 of the ASX Listing Rules, if applicable);
Once a matter is required to be disclosed, the ASX announcement will be approved by the Corporate Governance and Disclosure Committee and communicated to the ASX. When acknowledgement is received from the ASX that the announcement has been disclosed to the market, the General Manager Investor Relations will begin disseminating the information on the Company's website and through other appropriate media outlets.
The General Manager Investor Relations monitors the market in an effort to understand the reasons for movements in the CSR share price. If rumours or leaked information are considered to be the cause of unexpected movements in the share price, discussions with the ASX will be initiated as soon as practicable.
In general, CSR will not respond publicly to market rumours or speculation unless required to do so by the ASX.
Contact with Stockbrokers, Financial Analysts and the Media
It is a criminal offence to divulge market sensitive information to anyone who may take advantage of it before it is disclosed to the ASX.
The following rules apply to all Directors and employees:
- No formal or informal discussions may be held (including off the record discussions) about price sensitive issues with people outside CSR – and especially not with members of the financial community, including stockbrokers, financial analysts, investors, journalists and others who have an interest in market sensitive information unless expressly authorised by the Managing Director, Chief Financial Officer or General Manager Investor Relations.
- If discussions with the financial community are authorised by the Managing Director, Chief Financial Officer or General Manager Investor Relations, before the discussion takes place details of what may be said must be agreed and adhered to. A written report of discussions with such people must be promptly provided to the Managing Director, Chief Financial Officer or General Manager Investor Relations, who will – where necessary – copy it to all members of the Corporate Governance and Disclosure Committee.
- With the exception of the Managing Director, Chief Financial Officer and General Manager Investor Relations, only the Chairman, and with prior clearance from the Managing Director, specified business unit managers, will normally be authorised to have discussions with the financial community. Business unit managers are not authorised to discuss matters outside their specific area of responsibility.
- The Managing Director, Chief Financial Officer and General Manager Investor Relations may only conduct or authorise discussions with members of the financial community, media or other outsiders to:
- elaborate on information which has already been notified to the ASX;
- provide visits to CSR operational sites to promote improved knowledge of CSR, its businesses and products; or
- provide basic industry or company background information and other matters of public record.
- It is important that no such discussion includes mention of market sensitive information that was not contained in the original disclosure to the ASX. Outside parties would also be in breach of the law if they passed on market sensitive information as yet undisclosed to the share market. It is in everyone's interest for CSR people not to discuss such market sensitive issues with non-company people.
- During the time between the end of CSR's financial reporting periods (31 March and 30 September) and the announcement to the ASX of the financial results for those periods (often termed blackout periods), further restrictions are imposed to help ensure that CSR does not inadvertently disclose market sensitive information. Generally no presentations will be made to the financial community during blackout periods, except where the Managing Director decides that it is important for the Company to do so. Only the Managing Director, Chief Financial Officer or General Manager Investor Relations may respond to questions from the financial community during blackout periods.
- If any new market sensitive information is inadvertently disclosed, a member of the Corporate Governance and
Disclosure Committee must be urgently advised of the details so that the information can then be immediately released to the ASX.
- No matter how damaging, once market sensitive information ceases to be confidential, as when an outside party is informed (no matter how informally or unofficially this may be), CSR must immediately disclose it to the ASX.
Failure to advise the ASX immediately will mean that CSR and relevant employees are likely to be in breach of both insider trading laws and continuous disclosure laws. If the ASX is advised immediately, the damage done by the unlawful disclosure, together with the risk of legal action and the penalties and damages, are minimised.
Media Releases and Interviews
No employee may provide information to the media in general concerning CSR without the approval of the Managing Director, Chief Financial Officer or General Manager Investor Relations.
When a CSR person is seeking such approval, they should list the key points to be made, together with a summary description of the business advantage to CSR from providing the information.
The exceptions to the above rule are:
- trade media releases and other media contact relating solely to the marketing of CSR business units' products and services. No reference should be made to operational sales or profit performance. Commonsense should apply.
- local issues which are not contentious and will not attract attention outside a local community. Examples are comments by representatives of CSR operational sites on support for local charities, sporting events and the like.
- emergency situations – including after-hours incidents. In cases where failure to respond immediately will reflect badly on CSR, commonsense should be applied. The CSR person involved should obtain the highest approval possible in the circumstances.
Television cameras and crew, photographers, journalists or other media representatives are not permitted on a CSR site without approval of the Managing Director or General Manager Investor Relations.
Protecting Information or Intellectual Property
Under the Corporations Act, employees must not take personal advantage of their position or of company information. All information about CSR or owned by CSR must be properly dealt with by employees. Employees must ensure that Company information is disclosed to outsiders only for legitimate company purposes and that due care is taken to protect the value of that information.
Appropriate steps (such as confidentiality agreements and other protocols) must be implemented to protect confidentiality and intellectual property. CSR Legal can assist in providing advice and any necessary documents.
Improper Use of Information or Position in CSR
No employee or former employee may make improper use of information obtained by virtue of their position with CSR to gain an advantage for themselves or any other person or to cause detriment to CSR.
No employee may make improper use of their position with CSR to gain an advantage for themselves or any other person or to cause detriment to CSR.
Such breaches of sections 182 and 183 of the Corporations Law are punishable by fines of up to $200,000 and possibly imprisonment. The Company and others affected may also take action to restrain such breaches and/or recover damages for loss suffered.
Reviewed & Updated: 22 March 2017