Academic literature on the topic 'Securities Australia'

The continuous disclosure compliance of Chinese cross-border companies listed in Australia has long been a concern, as Chinese companies are either frequently delisted or rejected by the Australian Securities Exchange. The particularity of cross-border listings generates information asymmetry between securities regulators based out of the host jurisdiction and the home jurisdiction. This then impacts the effectiveness of the host jurisdiction’s supervision of the cross-border listed companies and each company’s continuous disclosure compliance. The purpose of this article is to clarify the issues surrounding cross-border supervision by the securities regulators in China to shed light on current dilemmas and suggest possible reform proposals. Considering the similarities of the securities markets in the US and Australia, as a case study example, this article looks at Luckin Coffee, a US-listed Chinese company, which created a scandal in 2020 when it was accused of continuous disclosure fraud. The case points out relevant lessons for Australia–China securities cross-border supervision.

In Morrison v. National Australia Bank Ltd., the U.S. Supreme Court limited the application of U.S. securities fraud law in transnational situations. The Supreme Court noted that its decision was influenced by international comity considerations. In this Article, we evaluate the availability of class actions in China in cases involving alleged securities fraud. Because we find that the availability of those actions is too limited to fully protect U.S. shareholders, we argue that U.S. investors should be permitted to bring securities fraud class actions against non-U.S. companies whose securities are traded on a U.S. exchange regardless of where those investors entered into the relevant securities transactions.

The global financial crisis highlighted the interconnectedness of international financial markets and the risk of contagion it posed. The crisis also emphasized the importance of supranational regulation and regulatory cooperation to address that risk. Yet, although capital flows are global, securities regulation is not. As a 2019 report by IOSCO notes, the regulatory challenges revealed during the global financial crisis have by no means dissipated over the last decade. Lack of international standards, or differences in the way jurisdictions implement such standards, can often result in regulatory-driven market fragmentation. This article considers a range of cooperative techniques designed to achieve international regulatory harmonization and effective financial market supervision. It includes discussion of a high profile cross-border supervisory experiment, the 2008 US-Australian Mutual Recognition Agreement, which was the first agreement of its kind for the SEC. The article also examines some key regulatory developments in Australia and Asia since the time of the US-Australian Mutual Recognition Agreement.

Insider trading has been criminalised in Australia for over a decade. Yet there have been few prosecutions in respect of such conduct, and none of these have been successful. There is little doubt that insider trading in Australia is extensive and is to be found across many sectors of the securities industry. Despite this, the law has not proved to be an effective vehicle for the social control of insider trading or for the deterrence of such conduct. It seems that the criminal sanctions for insider trading have been largely symbolic in nature. This article explores the obstacles to enforcement of criminal laws in this area by reference to findings from a national empirical study funded by the Criminology Research Council. The study involved in-depth interviews with almost 100 key figures in the Australian securities industry (brokers, lawyers, merchant bankers etc) and of officials involved in its regulation (from the Corporate Affairs Commissions and the Australian Stock Exchange). Problems in detection, proof and punishment, in the nature and extent of regulatory resources devoted to this area and in the content of the law itself are identified and discussed.

While American investors have been able to buy mortgage-backed securities since the late 1970s and asset-backed securities since the mid-1980s, investors in South Africa have not become involved in this growing market. Securitisation also spread to Europe, South America, Asia and Australia during the 1980s. The first securitisation in South Africa was completed in 1989, but since then only a few securitised products have been offered to the investment community. The aim of this article is to investigate the reasons for the lack of growth in securitisation in South Africa and to determine whether securitisation will grow to be a significant market in South Africa. The methodology used includes interviews held with investors, securitisation specialists and other structured finance specialists from the banking community. Experience from other countries is noted and included in this article

This paper highlights the origin and development of the Australian stock market. The country has three major stock exchanges, namely: the Australian Securities Exchange Group, the National Stock Exchange of Australia, and the Asia-Pacific Stock Exchange. These stock exchanges were born out of a string of stock exchanges that merged over time. Stock-market reforms have been implemented since the period of deregulation, during the 1980s; and the Exchanges responded largely positively to these reforms. As a result of the reforms, the Australian stock market has developed in terms of the number of listed companies, the market capitalisation, the total value of stocks traded, and the turnover ratio. Although the stock market in Australia has developed remarkably over the years, and was spared by the global financial crisis of the late 2000s, it still faces some challenges. These include the increased economic uncertainty overseas, the downtrend in global financial markets, and the restrained consumer confidence in Australia.

Purpose The purpose of this paper is to apply Faff’s (2015) pitch template to a regulatory financial accounting research topic. The author describes her personal reflections on completing the pitch template for this project by investigating corporate boards, monitoring and securities class actions (SCAs) in Australia. The author builds on prior research in this area (Chapple et al., 2014). This study is set within prior literature examining capital markets, corporate governance, continuous disclosure regime and regulatory changes. The market reaction to corporate board changes pre- and post-SCAs is the focus of the examination within the pitch template. The pitch letter contributes to prior literature, as it demonstrates a team with established researchers using the pitch template, while prior papers have documented PhD student usage of the pitch template. Design/methodology/approach The author uses the Faff (2015) pitch template to focus the research team’s ideas into a concisely focused research idea. An earlier version of this pitch was presented at the Centre for International Finance and Regulation Pitching Research Symposium on 29 May 2015 in Sydney to a panel of distinguished professors and participants from market regulators including the Australian Securities and Investments Commission, Reserve Bank of Australia, Australian Prudential Regulation Authority and the financial sector including Colonial First State. Findings It was found that there are benefits to using the pitch template for both established and emerging researchers. Prior pitch papers have primarily been authored by PhD students. This paper’s aim was to provide evidence that established as well as emerging scholars can benefit from completing the Faff pitch template. Originality/value This pitch letter contributes to the research community, as it shows the process and personal reflections on undertaking the pitch exercise by a team including established and emerging researchers. Within this pitch letter there is a documentation of how the research team for the underlying project was formed and the prior experiences of the team.

This paper considers the accuracy (or otherwise) of cost of equity estimates provided by a range of Australian asset pricing models on industry returns. The results suggest that a simple, constant-benchmark approach (fixed excess return of five percent per annum) provides the best forecast for the cost of equity capital for the various industry segments of the Australian Securities Exchange examined across the observation window. Our results from Australia corroborate U.S. findings regarding the disconnect between asset pricing models that provide the best ex-post explanation of asset returns and models that produce superior ex-ante predictions of the cost of capital.

Pending case law by the US Supreme Court (Morrisson v. National Australia Bank) and draft legislation in Congress threaten to expand the jurisdiction of US courts to cases where foreign, i.e. non US, plaintiffs sue foreign defendants over securities purchased in foreign securities markets. This article describes the many aspects of this threat, in particular for European investors, brokers, banks and ... lawyers.

This dissertation investigates the research and investment banking activities of securities firms in the context of the Australian equities market. It comprises of three related essays that examine the stock recommendations of securities firms' research analysts and the aftermarket behaviour of securities firms that assist in raising capital for companies via an initial public offering (IPO). The fust essay focuses on the market's general reaction to research analysts' recommendations. The buy and sell-type recommendations of research analysts are observed to significantly impact prices and trading activity at the time of their release. The market reaction is, however, asymmetric. Buy-type recommendations have a stronger impact on the trading activity of the recommending securities firms. This indicates that buy-type recommendations generate more stockbroking business and may explain why research analysts tend to issue more buy than sell­type recommendations. Sell-type recommendations have a greater price impact suggesting that the market perceives sell-type recommendations to be more informative and that it is aware of analyst over-optimism. Post-recommendation returns indicate that sell-type recommendations are more informative than buy­type recommendations. Significant pre-recommendation abnormal returns, however, suggest that there may be information leakage prior to the official release of research analysts' recommendations. Alternative explanations for pre­recommendation returns include poor timing ability, a reactive rather than pro­active approach to issuing recommendations and front running by proprietary traders. The second essay explores the aftermarket trading behaviour of securities firms that assist in raising equity capital for companies via an IPO (henceforth known as syndicate members). US studies document that the syndicate member with the most responsibility in the capital raising process (that is, the lead syndicate member) is the most active in aftermarket trading with the main purpose being to price support IPOs. Similar behaviour is observed in Australian IPOs except that the lead syndicate member only appears to price support IPOs that are trading at or below the offer price on the first day. The rest of the syndicate plays a minor role in aftermarket trading. The final essay considers the objectivity of stock recommendations issued by research analysts whose securities firms are IPO syndicate members. It also assesses whether the market adjusts for the strategic behaviour of research analysts. The recommendations of research analysts' whose securities firms are lead syndicate members (henceforth known as lead syndicate analysts) are observed to be more optimistic than the recommendations of other syndicate members (affiliate analysts) and from non-syndicate members. The market is aware of this and disregards the buy recommendations of lead syndicate analysts. The market also disregards the initial buy recommendations of affiliate analysts choosing instead to only rely on the subsequent buy recommendations of affiliate analysts.

According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced the commercial property sector’s dependence on bank financing The CMBS market has been one of the most dynamic and fastest-growing sectors in the capital markets, for a market which was virtually nonexistent prior to 1990. The global CMBS market issuance which stood at AU$5.1 billion (US$4 billion) in 1990 had grown to AU$380 billion (US$299 billion) by the end of 2006. In Australia, a total of over 60 CMBSs with nearly 180 tranches totalling over AU$17.4 billion had been issued to December 2006 from when they were first introduced in 1999. To date few studies have been done on Australian CMBSs outside the credit rating agency circles. These studies are predominantly practitioner focused (Jones Lang LaSalle 2001; Richardson 2003; Roche 2000, 2002). O’Sullivan (1998) and Simonovski (2003) are the only academic studies on CMBSs. As such, this thesis examines issues relating to the development of Australian CMBSs and quantitatively and qualitatively analyses the structuring of Australian CMBSs. In assessing the growth of the Australian CMBS market, an interpretive historical approach (Baumgarter & Hensley 2005) is adopted to provide a cogent review and explanation of features of international and Australian CMBSs. This helps to understand the changing nature of the market and provides better understanding of the present and suggests possible future directions. The Australian CMBS market is matured in comparison with the larger US and EU CMBS markets as seen by the diversity of asset classes backing the issues and transaction types, tightening spreads, and record issuance volumes.High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment.The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk.However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength.In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent.

According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced the commercial property sector’s dependence on bank financing The CMBS market has been one of the most dynamic and fastest-growing sectors in the capital markets, for a market which was virtually nonexistent prior to 1990. The global CMBS market issuance which stood at AU$5.1 billion (US$4 billion) in 1990 had grown to AU$380 billion (US$299 billion) by the end of 2006. In Australia, a total of over 60 CMBSs with nearly 180 tranches totalling over AU$17.4 billion had been issued to December 2006 from when they were first introduced in 1999. To date few studies have been done on Australian CMBSs outside the credit rating agency circles. These studies are predominantly practitioner focused (Jones Lang LaSalle 2001; Richardson 2003; Roche 2000, 2002). O’Sullivan (1998) and Simonovski (2003) are the only academic studies on CMBSs. As such, this thesis examines issues relating to the development of Australian CMBSs and quantitatively and qualitatively analyses the structuring of Australian CMBSs. In assessing the growth of the Australian CMBS market, an interpretive historical approach (Baumgarter & Hensley 2005) is adopted to provide a cogent review and explanation of features of international and Australian CMBSs. This helps to understand the changing nature of the market and provides better understanding of the present and suggests possible future directions. The Australian CMBS market is matured in comparison with the larger US and EU CMBS markets as seen by the diversity of asset classes backing the issues and transaction types, tightening spreads, and record issuance volumes.
High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment.
The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk.
However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength.
In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent.

According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced the commercial property sector’s dependence on bank financing The CMBS market has been one of the most dynamic and fastest-growing sectors in the capital markets, for a market which was virtually nonexistent prior to 1990. The global CMBS market issuance which stood at AU$5.1 billion (US$4 billion) in 1990 had grown to AU$380 billion (US$299 billion) by the end of 2006. In Australia, a total of over 60 CMBSs with nearly 180 tranches totalling over AU$17.4 billion had been issued to December 2006 from when they were first introduced in 1999. To date few studies have been done on Australian CMBSs outside the credit rating agency circles. These studies are predominantly practitioner focused (Jones Lang LaSalle 2001; Richardson 2003; Roche 2000, 2002). O’Sullivan (1998) and Simonovski (2003) are the only academic studies on CMBSs. As such, this thesis examines issues relating to the development of Australian CMBSs and quantitatively and qualitatively analyses the structuring of Australian CMBSs. In assessing the growth of the Australian CMBS market, an interpretive historical approach (Baumgarter & Hensley 2005) is adopted to provide a cogent review and explanation of features of international and Australian CMBSs. This helps to understand the changing nature of the market and provides better understanding of the present and suggests possible future directions. The Australian CMBS market is matured in comparison with the larger US and EU CMBS markets as seen by the diversity of asset classes backing the issues and transaction types, tightening spreads, and record issuance volumes. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. High property market transparency (Jones Lang LaSalle 2006b) and predominance of Listed Property Trusts (LPT) as CMBS issuers (Standard & Poor’s 2005b), who legally have to report their activities and underlying collateral performance to regulatory regimes such as Australian Stock Exchange (ASX)/Australian Securities and Investment Commission (ASIC) and their equity partners, have contributed to the success of the Australian CMBS market. Furthermore, the positive commercial real estate market outlook should support future CMBS issuance, with LPTs continuing their dominance as issuers. In investigating property risk assessment in Australian CMBSs, all the CMBSs issued over a six year period of 2000 to 2005 were obtained from Standard and Poor’s presale reports as found in their Ratings Direct database to identify and review how property risk factors were addressed in all issues and within specific property asset classes following the delineation of property risk by Adair and Hutchinson (2005). Adequate assessment of property risk and its reporting is critical to the success of CMBS issues. The proposed framework shows that assessing and reporting property risk in Australian CMBSs, which are primarily backed by direct property assets, under the headings of investment quality risk, covenant strength risk, and depreciation and obsolescence risk can easily be done. The proposed framework should prove useful to rating agencies, bond issuers and institutional investors. Rating agencies can adopt a more systematic and consistent approach towards reporting of assessed property risk in CMBSs. Issuers and institutional investors can examine the perceived consistency and appropriateness of the rating assigned to a CMBS issue by providing inferences concerning property risk assessment. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. The ultimate goal of structuring CMBS transactions is to obtain a high credit rating as this has an impact on the yield obtainable and the success of the issue. The credit rating process involves highly subjective assessment of both qualitative and quantitative factors of a particular company as well as pertinent industry level or market level variables (Huang et al. 2004), with the final rating assigned by a credit committee via voting (Kwon et al. 1997). As such, credit rating agencies state that researchers cannot replicate their ratings quantitatively since their ratings reflect each agency’s opinion about an issue’s potential default risk and relies heavily on a committee’s analysis of the issuer’s ability and willingness to repay its debt. However, researchers have replicated bond ratings on the premise that financial ratios contain a large amount of information about a company’s credit risk. In this study, quantitative analysis of determinants of CMBS credit ratings issued by Standard and Poor’s from 2000 – 2006 using ANNs and OR and qualitative analysis of factors considered necessary to obtain a high credit rating and pricing issues necessary for the success of an issue through mail surveys of arrangers and issuers are undertaken. Of the quantitative variables propagated by credit rating agencies as being important to CMBS rating, only loan-to-value ratio (LTV) is found to be statistically significant, with the other variables being statistically insignificant using OR. This leads to the conclusion that statistical approaches used in corporate bond rating studies have limited replication capabilities in CMBS rating and that the endogeneity arguments raise significant questions about LTV and debt service coverage ratio (DSCR) as convenient, short-cut measures of CMBS default risk. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. However, ANNs do offer promising predictive results and can be used to facilitate implementation of survey-based CMBS rating systems. This should contribute to making the CMBS rating methodology become more explicit which is advantageous in that both CMBS investors and issuers are provided with greater information and faith in the investment. ANN results show that 62.0% of CMBS rating is attributable to LTV (38.2%) and DSCR (23.6%); supporting earlier studies which have listed the two as being the most important variables in CMBS rating. The other variables’ contributions are: CMBS issue size (10.1%), CMBS tenure (6.7%), geographical diversity (13.5%) and property diversity (7.9%) respectively. The methodology used to obtain these results is validated when applied to predict LPT bond ratings. Both OR and ANN produce provide robust alternatives to rating LPT bonds, with no significant differences in results between the full models of the two methods. Qualitative analysis of surveys on arrangers and issuers provides insights into structuring issues they consider necessary to obtain a high credit rating and pricing issues necessary for the success of an issue. Rating of issues was found to be the main reason why investors invest in CMBSs and provision of funds at attractive rates as the main motivation behind CMBS issuance. Furthermore, asset quality was found to be the most important factor necessary to obtain a high credit rating supporting the view by Henderson and ING Barings (1997) that assets backing securitisation are its fundamental credit strength. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent. In addition, analyses of the surveys reveal the following: • The choice of which debt funding option to use depends on market conditions. • Credit tranching, over-collateralisation and cross-collateralisation are the main forms of credit enhancement in use. • On average, the AAA note tranche needs to be above AU$100 million and have 60 - 85% subordination for the CMBS issue to be economically viable. • Structuring costs range between 0.1% – 1% of issue size and structuring duration ranges from 4 – 9 months. • Preferred refinancing options are further capital market issues and bank debt. • Pricing CMBSs is greatly influenced by factors in the broader capital markets. For instance, the market had literary shut down as a result of the “credit crunch” caused by the meltdown in the US sub-prime mortgage market. These findings can be useful to issuers as a guide on the cost of going to the bond market to raise capital, which can be useful in comparing with other sources of funds. The findings of this thesis address crucial research priorities of the property industry as CMBSs are seen as a major commercial real estate debt instrument. By looking at how property risk can be assessed and reported in a more systematic way, and investigating quantitative and qualitative factors considered in structuring CMBSs, investor confidence can be increased through the increased body of knowledge. Several published refereed journal articles in Appendix C further validate the stature and significance of this thesis. It is evident that the property research in this thesis can lead aid in the revitalisation of the Australian CMBS market after the “shut down” caused by the melt-down in the US sub-prime mortgage market and can also be used to set up property-backed CMBSs in emerging countries where the CMBS market is immature or non-existent.

The rapid globalisation of finance has caused the securities and financial systems globally to be intricately, and inextricably, interwoven into a single financial ecosystem. This phenomenon has accelerated the trend towards international cooperation. While such cooperation has enhanced the standards of monitoring, supervision and regulation in the securities sector, it begets the question: Can cross-border collaboration be leveraged as a strategic tool to catalyse and achieve transformative results in three fundamental areas of securities markets: market development, integration and regulation? If so, are India and Australia well suited for such cooperation? To answer this question in the affirmative, this thesis conducts a comparative examination of the Indian and Australian securities regimes, and proposes a deeper, strategic bilateral collaboration between them. The thesis undertakes a high-level analysis of the securities regimes of the Indian securities regulator, Securities and Exchange Board of India (‘SEBI’), and its Australian counterpart, Australian Securities and Investments Commission (‘ASIC’), against the International Organization of Securities Commission’s (‘IOSCO’) widely endorsed 38 Principles of Securities Regulation, focusing on the supervisory and enforcement powers of these regulators and the effectiveness of their compliance regimes. The thesis addresses a fundamental gap in the scholarship on the comparative study of the Indian and Australian securities regimes. This academic exercise provides the foundation for a practical roadmap for strategic collaboration between the two jurisdictions. Consisting of the Cube Vision and the Strategic Action Plan, the thesis proposes a collaboration model that is scalable and may be replicated in other sectors of the financial sector or economy. Most significantly, the proposal is capable of being effectively transformed into a broader, multilateral strategic cooperation initiative in the future.

This thesis investigates the share price response to the announcement of private placements of hybrid securities in Australia. Firstly, the size and direction of the share price response is examined. Secondly, the determinants of the share price response are examined. Where possible, comparisons are made to evidence from international markets. The sample of data tested consists of 43 announcements of convertible debt issues, 39 announcements of preference share issues and 19 announcements of option issues made between 1983 and 2000 by Australian firms. The analysis of the share price impact in response to the announcements is conducted using Maynes and Rumsey (1993) event study methodology that adjusts for thin trading. The determinants of the share price response are examined using model specifications that are derived from the theoretical literature. The analysis of the announcement effect of private placements of hybrid securities finds significant negative abnormal returns for convertible debt issues, insignificant negative abnormal returns for preference share issues and significant positive abnormal returns for option issues. In comparison to international studies, the convertible debt results are similar to public and rights issues, the insignificant preference share results are similar to other findings and the option results are similar to private placements of equity and rights issues of options. The results of the investigation of the determinants of the announcement effect of private placements of hybrid securities finds that convertible debt issues are best explained by information asymmetry - firm and issue characteristics, the information asymmetry - external monitors hypothesis, the information asymmetry - dynamic hypothesis and the agency cost hypothesis. The impact of preference share issues is best explained by information asymmetry - firm and issue characteristics, the information asymmetry - external monitors hypothesis, the agency cost hypothesis and the price pressure hypothesis. The announcement effect of option issues is best explained by information asymmetry - firm and issue characteristics, the information asymmetry -dynamic hypothesis and the optimal capital structure hypothesis.

Studies on the use of hybrid securities by listed firms to raise capital in international markets have been limited. The existing evidence on the seasoned capital raising process has concentrated on straight equity and debt issues in the United States (US) market. The Australian market provides a unique comparative capital raising environment as it has a number of operating and structural features that are different to many other markets. These differences include the method of issuing securities (rights issues), underwriting contracts (standby contracts), the trading volume of securities (thin trading), the industry makeup of listed firms (a high number of resource firms) and characteristics of capital raising instruments (convertible debt is non callable and is the only type of listed debt instrument, options are used as stand alone instruments to raise capital). This research focuses on how these differences give rise to differences in the share price reaction to security issues, the relevant explanations of the share price reaction, the security choice decision and the demand for underwriter services in the Australian market, compared to other markets. The impact of the announcement of hybrid security issues is examined using event study methodology adjusted for thin trading (as per Maynes and Rumsey(1993). Australian markets have differing characteristics to international markets including differing issue and issuer characteristics of hybrid security issues. However, the announcement effect evidence for Australian hybrid issues is consistent with international evidence for convertible debt issues but is inconsistent for company issued options and preference shares. Announcements of convertible debt are met with a significant negative share market response, a positive pre announcement runup and negative post announcement dnft, similar to US and UK issues. Although the announcement of an option issue can be viewed as an issue of delayed equity, option issues are met with a significant positive share price response rather than the negative share price response found for international equity issues. Announcements of preference share issues are met with an insignificant positive share price response which is in contrast to US and UK results. The results of the analysis of the explanation of the announcement effect of issuing new hybrid securities in the Australian market, suggest that different variables are significant explanators for the Australian market compared to international markets. The results of the models developed for the explanations of the announcement effect of Australian hybrid issues differ across security type. In general, the results for Australian issues of hybrid securities provide the greatest support for variants of the information asymmetry hypothesis. Convertible debt issues are best explained by the general information asymmetry hypothesis and the information asymmetry : external monitoring hypothesis. Option issues are best explained by information asymmetry : rights issues information asymmetry : signalling and agency cost hypotheses. Preference share issues are best explained by information asymmetry : rights issues, information asymmetry : external monitoring and the information asymmetry : signalling hypothesis. The security choice decision between hybrid securities is examined using logit regression analysis. When the choice is restricted to options and convertible debt, firms with high financial risk (leverage) and firm nsk (share volatility) are more likely to issue equity or in this study, equity like securities (options) and firms with higher pre announcement returns and larger issue size are more likely to issue debt or debt like securities (convertible debt). When the choice is extended to include preference shares, firms with high firm risk are more likely to choose options and firms making a relatively large issue are less likely to choose options (when financial risk is measured as long term debt over total assets) or more likely to choose convertible debt (when financial risk is measured as long term debt over equity). The determinants of underwriter use are examined using logit regression analysis for option issues as they are the only type of hybrid instruments that are not mostly underwritten. The results for the demand for underwriter services show that issue size, trading frequency and market risk are the determinants of the use of underwriters for Australian option issuers. This implies that mangers are more likely to choose to use an underwriter, the higher the amount of capital to be raised, the higher the trading frequency of the shares and the lower the market risk. The results are similar to partial results found for New Zealand and Norwegian equity issues where subscription price discount, issue size, firm risk, trading frequency, shareholder concentration and shareholder precommitments are determinants of underwriter use.

Australia has been spared recent collapses of significant financial institutions. The powers of Australian regulators to resolve a failing institution have not been tested in the courts. The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission are given broad immunities from suit by potential claimants, except in respect of conduct not in good faith. It is likely that this would allow claims for intentional torts, such as the tort of misfeasance in public office. Cases where the elements of that tort could be made out by an affected institution, depositor, or other counterparty to that institution should be rare. In addition, the Commonwealth Constitution provides some protection against regulatory action that might be characterized as an acquisition of property that is not on just terms. An action by APRA that had this character could give rise to a statutory ground for compensation against the Commonwealth.

This chapter focuses on how the Australian Securities and Investment Commission’s general regulatory approach has informed its response to the challenges facing investor trust and confidence as a result of high frequency trading and the growth in dark liquidity. Technological change, increasing competition, and globalization mean that financial markets are changing more rapidly than ever before, posing a number of challenges from a regulatory perspective. This is particularly true for exchange markets: innovation and advances in information technology are delivering lower costs for investors, yet alongside these positive developments is a need for continued testing, monitoring, and accountability. In this context, the chapter discusses ASIC’s responses to both real and perceived problems in the market, as well as the changes stimulated by ASIC’s actions.

This chapter gives an overview of specific statutory regimes that require shareholder approval where directors are conflicted. These include related party provisions, as well as detailed regimes governing directors’ service contracts, substantial property transactions, loans and quasi-loans, credit transactions and related arrangements, and payments for loss of office. Each of these provisions is, in a sense, a more specific enunciation of the broader prohibition on conflicts. These regimes apply to situations in which corporate history has shown that a requirement of board approval was insufficient to combat inherent conflicts, undermining directors’ accountability. Shareholder approval is now therefore required. Securities regulators in each jurisdiction impose additional requirements (such as disclosure) to ensure transparency and fairness. Given that related party regimes deserve a book in their own right this chapter is necessarily an overview. It outlines the UK position and key features of the regimes in Australia and Hong Kong for comparison.

This chapter describes the process individuals must go through to gain entrance to immigration detention facilities in Australia, highlighting marked similarities between these centres and prisons. It shows that visitor application and entrance processes have become complex and intimidating in recent year as centres have taken an increasingly securitized approach to visitor admission. In describing these processes and their escalation, this chapter begins to reveal the mechanisms of bureaucratic control that characterize Australia’s onshore detention system. It also shows how visitors are targeted as part of this carceral system.

In May 2021, CRIS and AVERT members Professor Michele Grossman, Mark Duckworth, Lydia Khalil, Dr Joshua Roose and Dr Mario Peucker appeared as expert witnesses at the public hearings held in Canberra for the Parliamentary Joint Committee on Intelligence and Security’s Inquiry into Extremist Movements and Radicalism in Australia. Professor Michele Grossman, Mark Duckworth, Professor Greg Barton, Dr Vivian Gerrand, Dr Matteo Vergani, Dr Mario Peucker, Professor Hass Dellal and Jacob Davey