ASIC is right to maintain the rage against inappropriate disclosure but heaping more constraints on analysts comes at a potential cost. (See Report 393, Handling of confidential information: Briefings and unannounced corporate transactions, May 2014 for ASIC's views.) Market efficiency is fostered by analysts fearlessly expressing opinions. Out of consensus opinions should be welcomed. They can arise by methodically assembling a mosaic of individually non-material pieces of information and conducting interviews to confirm analytical conclusions. The internal and external regulatory surveillance faced by analysts could become so intimidating that they fear drifting too far away from the herd. Tracking the consensus becomes the easiest way to earn a living. Under some circumstances, this could prove as deleterious to market efficiency as insider trading. Who is measuring that cost?
An interesting point John. Take a side step into the medical industry where doctors are increasingly fearful of litigation and as a result the health system is being clogged up with unnecessary and referrals so that doctors are covered on all fronts. This is coming out of tax payer money in most cases and causing congestion in the public health system. So much scrutiny that the system no longer works.