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Reform urgently needed to keep capital flowing

Capital Markets, Corporate and M&A
Reform for capital

While the Australian Government's early response to the nation's cascading economic crisis has naturally targeted debt and insolvency, partners Jeremy Lanzer and Jason van Grieken argue that policymakers and regulators need to swiftly turn their attention to equity if we are to avoid seeing quality listed companies miss the chance to raise life-or-death capital.

In an opinion article published in today's Australian newspaper, Jeremy and Jason set out the necessary components of an equity markets stimulus package” to support companies with strong fundamentals and solid investment propositions that can make it through the next six months.

“There are fundamental differences between an economic crisis triggered by financial markets and the current recoil in the face of an unprecedented public health crisis,” they write. But “the most genuinely relevant lesson to be learned from the GFC - albeit a very different species of crisis - is that across the economic abyss opening up before our eyes there'll be money out there ready to be invested.”

The package recommended by the partners includes four core components, including safe harbour from COVID-19 impact disclosure requirements, as well as the kind of regulatory reforms introduced in New Zealand yesterday, which enable NZ-listed companies to issue downside protection mechanisms for retail shareholders.

These unprecedented times call for unprecedented action and courage from market regulators. And that action can't wait for the crisis to escalate further - the very survival of many of Australia's iconic listed companies depends on it.”

To read the full article, click here.

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