As the Financial Services Minister Chris Bowen said, Australia is the only major Western nation to have avoided a recession in the worldwide slump. Even though Australia had close financial relationships with Asian countries, it seems that Australia's economy has not been affected by other crisis countries. Thanks to the nation's well developed capital market and the unique financial regulation system, investors still feel confident to Australia's equity market which is the eighth largest in the world. This report contains two tasks. The first task of this report was to investigate the method National Australia Bank (NAB) used in raising funds, advantages and disadvantages of other alternatives will also be commented. Moreover, the report presents the reason of a company preferring to raise equity other than debt. The other task of the report was focused on the role of four corporate regulators in Australia: Australian Competition and Consumer Commission (ACCC), Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and Reserve Bank of Australia (RBA). Finally, a recent event - ACCC opposed NAB's proposed acquisition of AXA Asia Pacific Holdings (AXA) - provided an example in which the regulator intervened a company's inappropriate action. Task 2 - Discuss Role Of Company Regulators 6
3.1 The Role of Corporate Regulators in Australia There are some of regulators in Australia such as ASIC, ACCC, APRA, RBA, ASX etc. This is the six mainly mission includes monitoring the market; which is monitor a range of sources to detect unsafe goods such as injury and death information, overseas trends, products in the market, product analysis, and consumer complaints. Secondly it can reflect on Encouraging safe practices; which is negotiating product removal, removing unsafe goods, Promoting good product safety management, making consumers aware of product hazards. Thirdly, working out ways to address hazards can be expressed in product analysis, working with technical experts, working with suppliers and industry associations, educating suppliers and consumers about product safety, issuing warning notices, creating regulations where necessary.
Next, regulating hazardous products conducting regulators using bans and standards, regulators will either ban products or require them to meet specific safety standards. Enforcing regulations, which is respond to breaches of product safety bans and standards through a range of enforcement tools, including civil and criminal legal action and monetary penalties. The last, working with other regulators, Australian and overseas regulators of general consumer products and specific products often work together to share intelligence, monitor issues and resolve product safety issues. http://www.productsafety.gov.au/content/index.phtml/itemId/974712#h2_20 However, there is some recognition when the regulators are closer looked. Australian regulatory structure:
3.1.1 Australian Competition and Consumer Commission (ACCC) Australian Competition and Consumer Commission's the main purpose of regulate competition policy; promotes competition and fair trade in the market place to benefit consumers, business and the community. It also regulates national infrastructure industries. Its primary responsibility is to ensure that individuals and businesses comply with the Commonwealth's competition, fair trading and consumer protection laws.
3.1.2 Reserve Bank of Australia (RBA) Reserve Bank of Australia, it is aim to System stability and payments system; it conducts monetary policy, works to maintain a strong financial system and issues the nation's currency. As well as being a policy-making body, the Reserve Bank provides selected banking and registry services to a range of Australian government agencies and to a number of overseas central banks and official institutions. It also manages Australia's gold and foreign exchange reserves.
3.1.3 Australian Prudential Regulation Authority (APRA) Australian Prudential Regulation Authority influence on prudential regulation and supervision of deposit-taking institutions; APRA play a critical role in protecting the financial well-being of the Australian community: as a result, high standards are required in everything we do. In our work and in our interactions with others, we value and seek to demonstrate
3.1.4 Australian Securities and Investments Commission (ASIC) Australian Securities and Investments Commission's regulation impact market integrity and consumer protection; ASIC regulate Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit.
3.2 ACCC's Intervention on NAB These corporate regulators might intervene in certain circumstances if a company acted inappropriate. For example, ACCC opposed NAB's proposed $14 billion acquisition of AXA Asia Pacific Holdings (AXA) in 19th April 2010. Generally, the primary responsibility of ACCC is to ensure that individuals and businesses comply with the Commonwealth's competition, fair trading and consumer protection laws. It is the only national agency dealing with competition matters generally. It has general consumer protection responsibilities and powers to prohibit companies from substantially lessening competition. Refer to the case, the ACCC chairman Graeme Samuel provided that a substantial lessening of competition in the retail investment platforms market with complex investment needs would be caused by a merger between NAB and AXA. Furthermore, ACCC did not oppose AMP's planned $12.85 billion acquisition of AXA. The reason is ACCC found that NAB was a significant competitor in the provision of retail investment platforms for investors with complex needs whereas AMP was not a significant competitor in this circumstance. Later, the NAB revised its proposal in which it plan to sell AXA APH's North platform to IOOF in order to alleviate its competition concerns. In the past month, ACCC extensively investigated the new proposal, and received information from a wide range of resources, which include public opinion through market consultation ended on 23rd March. Its decision would be announced on 9th September 2010.