Materiality in continuous disclosure

The High Court's recent decision in Fortescue Metals Group did not, as some had hoped, clarify the materiality threshold for continuous disclosure one way or the other. The High Court disposed of the matter on the tight point about whether the ASX release in question was misleading or not. This paper does not address the High Court decision in Fortescue. The purpose of this paper is to examine the question of materiality for continuous disclosure purposes.

It may be trite to say that continuous disclosure by ASX listed companies is all about "material information" or "price sensitive information", but there are suggestions from some quarters that the Corporations Act disclosure threshold is much lower.

In other words, the continuous disclosure provisions are said, by some, to require disclosure of information that is not material in the sense that it would not affect the price at which listed securities will trade.

The purpose of this paper is to track the legislative history of section 677 of the Corporations Act 2001 (Commonwealth) (and its predecessors) in order to shed some light on the Parliamentary intention behind the key concept in Australia's continuous disclosure regulatory regime. It is also trite to say that the purpose of statutory interpretation is to try to give effect to what Parliament intended, but in order to do that, it is necessary to look at the
context in which Parliament has spoken.