There was widespread support for the Commission's proposal to raise transparency in remuneration by disclosing remuneration policy for the next financial year and by unveiling the remuneration of individual directors in the preceding financial year. Most respondents also agreed with the Commissions plan to boost shareholders' role in approving share-based remuneration schemes, for example share options, for directors. Concerns were, however, expressed over the Commission's intention to invite Member States to implement the requirements of the future Recommendation through regulatory measures. Doubts were also expressed as to the need to involve the Annual General Meeting in discussing and approving directors' remuneration policy. (b) Next steps The Commission will draft a Recommendation on fostering an appropriate regime for the remuneration of directors, taking due account of the comments expressed in the consultation. The aim is to adopt the Recommendation in autumn 2004. (c) Background The Commission's Action Plan to modernise company law and enhance corporate governance in the EU, announced in May 2003 (see IP/03/716 and MEMO/03/112) contains a set of initiatives aimed at strengthening shareholders' rights, reinforcing protection for employees and creditors, increasing the efficiency and competitiveness of European business and boosting confidence on capital markets. The Action Plan recognises the need for shareholders to be able to appreciate fully the relationship between the past and future performance of companies and directors' pay and to make decisions on aspects of remuneration linked to the share price such as share options for directors. Public consultation on the Plan as a whole, which ended in mid-September 2003, showed a strong consensus behind the main measures within it. The Commission is now committed to further open consultation on each of those key measures and the consultation exercise on directors' remuneration was the first of several arising from the Action Plan. For the full text of the report, please see: 1.12 Parliamentary Committee reports on the CLERP 9 Bill The Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill, which is currently before Parliament, represents one of the most significant reforms to Australia’s corporate regulation in many years. The Bill has been examined by the Parliamentary Joint Committee on Corporations and Financial Services. The Committee has released two reports on the Bill. These were published on 15 June 2004 and 4 June 2004.
Regulation, said. 'ASIC has given this additional time strictly on the basis that MDA operators will take immediate steps to fully comply with the requirements of the ASIC class order and policy. Any MDA operator who believes there are any impediments to complying fully with the requirements of the class order should consider applying to ASIC for further relief', she said. Copies of PS 179, C0 04/194 and amending Class Order 04/612: Managed discretionary accounts - amendment, and Information Release 04-08: ASIC policy statement: managed discretionary account services are available on the ASIC website. 2.8 Soft dollar benefits need clear disclosure The Australian Securities and Investments Commission on 10 June 2004 released a research report on soft dollar benefits in the financial planning industry. The research explores the types of benefits that are offered to financial planning firms and how they are disclosed to clients. Soft dollar benefits are benefits other than standard commission payments. ASIC’s report reveals that a wide range of soft dollar benefits are being offered. Benefits to individual advisers include overseas trips, share options and cash bonuses for selling particular financial products. Benefits to financial planning firms include ‘fee rebates’, potentially worth millions of dollars each year to the larger firms. The report contains examples of both good and poor practice, which will provide guidance for industry about effective disclosure. ‘If advisers accept benefits with the potential to influence advice, the law requires they clearly disclose these conflicts of interest to clients’, said Mr Greg Tanzer, ASIC’s Executive Director of Consumer Protection and International. A number of firms are commended for clearly explaining soft dollar benefits in consumer-friendly language. Other firms are leaving their clients in the dark about these incentives, with disclosure that is vague or, in extreme cases, non-existent.