ASIC has released a Consultation Paper, Responsible handling of rumours, outlining proposed principles and guidelines designed to assist market participants in their dealing with market rumours.

The proposed principles to assist AFS licensees when handling rumours, include:

• a requirement to have written policies and procedures on handling rumours and a process for supervising compliance with these;
• a requirement to have formal training for employees and representatives on the policies and procedures applicable to rumours;
• a general prohibition on the origination of rumours;
• a prohibition on the circulation of rumours, except where the rumour is in wide circulation and a judgement is formed that in the circumstances the rumour would not unduly distort the market;
• a process for attempting to verify rumours; and
• a requirement that a rumour must be described as such, if it is approved to be passed on, and must not be embellished.

Consultation closes on 9 November 2009.