The ASIC Registers and Privatisation: Should the Registers be run for profit?

In an article on Wednesday 14 September Anthony Klan, in the Australian, notes that businesses pay the government approximately $660m in filing fees to lodge material with the Australian Securities and Investments Commission (‘ASIC’) Registers, and the government charges $60m per year to the public for access to those records.  The ASIC Annual Report for 2015 does not disclose how much it costs to run the Registers, with only a general line for ‘information costs’ at just over $6m of a $100m in supplier’s expenses.  If that amount can be attributed as the cost of running and maintaining the Registers, it would appear that the Registers are running at a significant profit.

ASIC asserts that the majority of searches performed on its Registers are free.  However, the information returned by the free searches is very basic, listing only the name of the registered entity, the date of registration, any former name, the entity’s status, the general location of the registered office, the company type and a list of the last documents lodged by the company.  Much of that information could be gathered by a simple internet search.  The most basic search of the Register beyond that free search, which returns a ‘current company extract’, costs $9 if conducted online.  More relevant information, such as a ‘current and historical company extract’, sees the fee jump to $19.  Further searches increase in fee significantly.  All searches incur a $3 fee if requested by mail.

Other jurisdictions have far more open access to their filed company data.  In New Zealand, the majority of searches are free, including access to some Annual Returns of companies and detailed lists of directors and shareholders, highlighting in particular instances of director-shareholders, with no requirement to log in or register to search.[1]  In the United Kingdom, ‘in line with the government’s commitment to free data’,[2] significant amounts of information is available for free, including current and resigned officers or persons with significant control and filed documents such as Annual Returns.

The contrast is striking, and warrants further consideration in the current debate about privatisation of the ASIC Registers.  Even before considering the risks associated with private control over corporate data, the question should be asked, should the Registers ever be a profitable exercise, or should there be only a cost of services recovery?  Taking the question a step further, should this information be freely available to the public in a similar fashion to the UK government commitment, regardless of the cost of provision?  Whilst not querying a cost recovery from incorporated entities for registration, strong questions should be asked as to whether there should be any fee associated with searching those Registers once that information has been obtained.  As Brandeis said, “[p]ublicity is justly commended as a remedy for social and industrial diseases.  Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”[3]  Permitting access to the public at a cost which bears no obvious relation to the cost of provision of the service hinders two of ASIC’s three stated strategic priorities: promoting investor and financial consumer trust and confidence, ensuring fair, orderly and transparent markets.[4]

 

[1]               As per https://www.business.govt.nz/companies/learn-about/searching (accessed on 15 September 2016).

[2]               According to the disclaimer at the top of http://direct.companieshouse.gov.uk/ directing users to the free public access service, in beta testing.  The previous access method, of creating a Companies House Direct account with a £4 per month fee providing access to all historical company records and the CHD database at a flat rate of £1 per document, is also still available.

[3]               L Brandeis, Other People’s Money—and How Bankers Use It (Frederick A Stokes Company Publishers, New York, 1914) 92.

[4]               As per http://asic.gov.au/about-asic/what-we-do/our-role/ (accessed on 15 September 2016).

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