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Revised regulatory guidance on related party transaction and expert reports

by Hilary Kincaid 30. March 2011 14:16

RG 76 Related party transactions has been updated. The aim of the guidance is to improve disclosure by public companies and registered managed investment schemes regarding related party transactions. More information is available on the ASIC site.


RG 111 Content of expert reports and RG 112 Independence of experts have also been revised. The object of the revision, which follows public consultation, is to ensure reliability and quality of reports commissioned to assist security holders in making major decision on schemes of arrangement, takeover bids and related party transactions.


Additional guidance is provided on how experts should assess whether a proposal is fair and reasonable, and how experts should explain any material difference between their assessed value of a security and its recent market price.

There is clarification about the use of the discounted cash flow methodology, particularly when valuing a start up project where there is a long lead time until cash is generated. The expert must have a reasonable basis for the forward looking information and be explicit in disclosing the extent and nature of the adjustments made to allow for development stage risks.


ASIC | Compliance


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