The Johnson report’s recommendations do not go far enough in offering solutions, particularly in supporting a viable retail bond market, according to fixed interest investment firm FIIG Securities (FIIG).
One of the issues facing the debt market is Australian retail investors in Australia have a very high equity weight in terms of investment asset allocation and conversely a very low bond weight, FIIG head of strategy and market development Stephen Nash said.
Another issue is Australian corporations do not have adequate retail debt funding, Nash said.
“Together, these two problems highlight the need to develop a viable retail bond market in Australia as exists elsewhere in other developed economies,” he said.
“In other words, the creation of a viable retail bond market will benefit both investors and corporations – a development that will be of long-term national significance,” Nash said.
FIIG would recommend greater alignment between the requirements for equity and debt issuance be achieved, that the operation of these aligned requirements be evident both in the OTC (over-the-counter) market as well as in the listed market, and that further consideration be given to the trading and settlement of existing debt issues.
On 15 January 2010, Minister for Financial Services, Superannuation and Corporate Law Chris Bowen and Assistant Treasurer Nick Sherry released the Australian Financial Centre Forum’s report on Australia as a Financial Centre (the Johnson report).
The government commissioned the report in September 2008 with the aim of securing Australia’s future as a leading financial services centre.
