The government has introduced the Corporations Amendments (Simple Corporate Bonds and Other Measures) Bill with a view to "cut red tape" for businesses issuing simple corporate bonds.
The Bill amends the Corporations Act to introduce a two-part simple corporate bonds prospectus, according to a joint statement from the Minister for Financial Services and Superannuation Bill Shorten and Deputy Prime Minister and Treasurer Wayne Swan.
The new prospectus reduces compliance costs associated with the offer of simple corporate bonds to retail investors in the first issuance and subsequent tranches, according to the statement.
It modifies the current director's liability attached to the offer of simple corporate bonds and clarifies defences provided in respect to director's liability that apply to all offers of securities, the statement says.
Through the introduction of simple corporate bond depository interests, the new Bill also allows for simple corporate bonds to be transferred from the wholesale to the retail market.
"A vibrant retail corporate bond market will put competitive pressure on bank lending rates to business and allow us to harness our national superannuation savings so we can domestically fund more productive investment in our economy and reduce our reliance on offshore wholesale funding markets," the statement says.
