Consultation Paper 389 and draft Regulatory Guide 000: Pre-hedging
Submission Date: 29 July 2026
The Corporations Committee of the Business Law Section of the Law Council of Australia (the Committee) welcomes the opportunity to respond to Consultation Paper 389 Proposed regulatory guide on pre-hedging (CP 389) and the accompanying draft Regulatory Guide 000 Pre-hedging (Draft Regulatory Guide), released by the Australian Securities and Investments Commission (ASIC) on 15 June 2026.
This submission focuses on three matters: the application of the insider trading prohibition in section 1043A of the Corporations Act 2001 to pre-hedging; the definition of pre-hedging and the scope of its application, having regard to the final report published by the International Organisation of Securities Commissions (IOSCO) in November 2025; and the better practices proposed in Proposal B2. A summary of the Committee’s responses to ASIC’s specific consultation questions is provided towards the end of this submission.
The Committee broadly supports ASIC’s initiative in developing the Draft Regulatory Guide. It is an important initiative on ASIC’s part to replace the 1 February 2024 letter to CEOs on pre-hedging and reinforce ASIC’s conduct expectations with respect to pre-hedging activity. In this respect, the Committee notes that the proposed guidance appropriately seeks to mirror the recommendations and findings in IOSCO’s final report.
However, as noted in the submission, imposing requirements beyond those recommendations—by way of the “better practice” guidelines, which seek to import observations of the Federal Court in the ANZ and Westpac cases—creates several operational issues, especially for financial institutions with operating across multiple jurisdictions and, in certain instances may lead to poorer client outcomes. If, notwithstanding the foregoing, ASIC remains of the view that the better practice guidelines should be retained in the final regulatory guide, the Committee makes the following comments for ASIC’s consideration.
The Committee’s submissions should not be read as detracting from the Committee’s support for the overall initiative. The Committee generally supports ASIC’s principles-based approach in the Draft Regulatory Guide and welcomes the opportunity to engage further before the regulatory guidance is finalised, and would encourage ASIC to do so.
Last Updated on 10/08/2026
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