Australia’s Swan Proposes Law to Encourage Retail Corporate Debt

Australia will today introduce legislation to make it easier for individual investors to buy and sell corporate bonds.

The changes will simplify compliance, alter directors’ liabilities and facilitate the transfer of securities from the wholesale bond market, according to an e-mailed statement from Treasurer Wayne Swan.

The bill is part of efforts by Prime Minister Julia Gillard’s government to encourage pension savers to buy more fixed-income securities. The country’s retirement funds have the highest allocation to equities and the second-lowest holdings of bills and bonds among 29 nations tracked by the Organization for Economic Cooperation and Development.

“This is a really important reform for Australian companies to help them tap into our growing self-managed superannuation savings pool as another source of funding,” Swan said in the statement.

Australia’s benchmark stock index swung from a 41 percent drop in 2008 to a 31 percent gain the following year, and has risen 7.3 percent in 2013. The nation’s corporate bonds have produced positive returns every year since Bank of America Merrill Lynch index data began in 1997, gaining 0.5 percent so far this year.

The legislation follows the passage of laws last year to allow retail trading of federal government securities.

To contact the reporter on this story: Benjamin Purvis in Sydney at bpurvis@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.