The corporate watchdog will conduct random checks on companies this reporting season to ensure discussions with analysts don't break insider trading laws.
The Australian Securities & Investments Commission will have its officers sit in on boardroom briefings because of concerns some analysts sometimes receive inside information not available to the general public.
Listen to my interview with ASIC commissioner Cathie Armour broadcast on AM.
The crackdown comes as ASIC investigates allegations that Newcrest Mining selectively briefed analysts days before officially revealing deep job cuts and a multi-billion dollar profit downgrade.
In the leadup to the market announcement on June 7, analysts at six investment houses downgraded their outlook which saw the Newcrest share price fall almost 12 per cent.
|Newcrest share price slide in leadup to to June 7 announcement Source: Bloomberg|
ASIC commissioner Cathie Armour says the reporting season is an "opportune time" to send a message to listed companies that the regulator is watching what is said in communications to analysts.
"One of the things we're looking to do is to check with a limited number of companies exactly how they go about doing this, how they go about briefing analysts, and what sort of conversations they have, what sort of procedures they may put in place," Ms Armour told AM.
While the random checks by ASIC will have to be approved by companies, ASIC is expecting a high level of cooperation.
"We think companies will be delighted to do so, because this issue really goes to that heart of market integrity and this is a matter that companies are as interested as ASIC is," Ms Armour said.
However, Ms Armour rejected criticisms that companies will be on their best behaviour if an ASIC officer is sitting in on briefings.
"It doesn't matter if there's great behaviour when we go along; we learn something from that. We have some guidance already that we've published about how companies should interact with analysts, and the things we learn from what we see will inform our assessment of whether the guidance we have is good enough."
Ms Armour refused to rule out the option of using telephone interceptions if there was evidence of insider trading.
"If there's a reason for a concern, we'll consider using all of our powers. At the moment, we're just talking about a thematic and proactive approach to the issue, as distinct from a law enforcement approach."
The crackdown from ASIC might prompt better boardroom behaviour, but a tougher challenge will be to eliminate the informal passing of privileged information away from offices.
ASIC has refused to comment on the Newcrest investigation.
Newcrest recently appointmed former ASX and ABC chairman Maurice Newman to review its adherence continuous disclosure laws.