The Penalty Quantum for Non-compliance with Corporate Disclosure: Solace for the Market

In June 2014 a significant event happened in securities regulation and compliance - the New Zealand market operator used its enforcement power to discipline a major corporate player with a penalty (NZ$150,000) for its breach of the disclosure rules. The market disclosure rules have been in operation since 2002 but until then there had been no instances where compliance has been enforced so overtly and to such a magnitude. Australia operates a similar system of disclosure regulation to New Zealand, but its enforcement record stands in stark contrast, where around the same time, a major Australia company agreed to a penalty of AU$1.2 million for two contraventions of similar laws. This article reviews the New Zealand regulatory landscape in mandatory disclosure and compliance and reflects on the relevant market operators' and regulators' power and appetite for enforcement. These contrasting examples raise interesting questions in corporate law as to the effectiveness at enforcing market discipline in relation to disclosure, and whether quantum matters.