Better disclosure of the use of financial instruments should not cost more, industry association says.
ASIC's call for corporations to review the adequacy of their financial instruments disclosure does not have to lead to increased costs, the Investment and Financial Services Association (IFSA) has said.
"I don't think it will impact compliance costs," IFSA deputy chief executive John O'Shaughnessy said.
The regulator yesterday released a guide for corporations in which it identified areas that deserve heightened attention in the preparation of financial reports.
ASIC said it had encountered inadequate disclosure on financial instruments in a review of financial statements.
In some cases, companies had resorted to generic disclosures that offered little insight into a company's health.
Hedging strategies were also sometimes poorly disclosed, ASIC said.
"Market risk disclosures and sensitivity analysis were sometimes net of the effect of hedging arrangements," the regulator said.
Companies should also disclose when their loans mature, especially now that the opportunities to refinance debt have decreased.
O'Shaughnessy said the regulator had made a salient point, but he did not expect far reaching consequences. "I don't expect a wholesale review of disclosure [rules]," he said.
He added that the feedback from IFSA members on the regulator's guide has been good.
"We certainly think that ASIC is on the right path as far as disclosure by listed entities goes," he said.
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