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To: Jeffrey S. Mitchell who wrote (642)	8/23/2000 12:35:23 AM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 8/15/00 - ASIC Revises Its Proposed Approach for Dealing with Internet Discussion Sites On August 15, the Australian Securities & Investments Commission released an Exposure Draft of Interim Policy Statement IPS 162 entitled "Internet Discussion Sites". IPS 162, in effect, proposes to revise ASIC's earlier-proposed approach for dealing with Internet Discussion sites. The draft interim policy, prompted by concerns over cybersmears and message board stock manipulation schemes, departs significantly from a discussion paper ASIC released regarding Internet Discussion Sites earlier this year on June 20. According to ASIC's announcement of the release of IPS 162: The ASIC Exposure Draft released today continues the policy that a licence should not be needed to run a facility that only allows ordinary investors to swap information and talk to one another about their investment experiences. But this applies only if the site is not likely to lead investors to mistake it for a place where they can expect to get professional advice, or access professional investment services. . . . ASIC has refined the warning that users must get before they can view postings. These warnings are designed to make sure people understand the kind of information that they get on these sites. "The sorts of warnings we suggest include that the IDS itself does not endorse or vouch for the accuracy of the postings, a statement that the postings are general information and a declaration that people who post information will be individually responsible for their authenticity and accuracy. . . " "ASIC also suggests the sites link to ASIC's web-page www.watchdog.asic.gov.au so people can find an [sic] licensed investment adviser and get general information about investing." cybersecuritieslaw.com ===== ASIC takes soft line on chat sites By Morgan Mellish and Leon Lester Australia's corporate watchdog has rejected calls for tougher regulation of internet chat sites, despite a series of highly publicised frauds over the web. The Australian Securities & Investments Commission yesterday suggested a hands-off approach to regulating the internet, claiming it had sufficient mechanisms in place to monitor chat room activity. Under draft proposals, chat site operators will not be required to be licensed and users will not have to identify themselves before posting information on stockmarket-related websites. In the first major attempt by a securities regulator to oversee internet chat rooms, ASIC will rely on website operators and the public to stop fraud and other scams aimed at manipulating share prices. Most industry participants welcomed the proposals but some observers said the ASIC policy would be ineffective in stamping out fraud. ASIC also released a survey of online stockbrokers that showed only three-quarters of brokers presented information in an accurate and accessible manner. The ease of fraud on the internet was highlighted by a recent case in which a university student was caught posing as Coles Myer chief executive Dennis Eck on an internet chat room with a view to pumping up the Coles Myer share price. The youth used his parents' computer to post a notice in February on the popular Hotcopper site referring to upcoming profit results for the retailer. However, ASIC director of regulatory policy, Mr Malcolm Rodgers, said the approach outlined yesterday would be effective. "It's not as hard to find ultimate identities as some people like to think," Mr Rodgers said. "There's an ISP [Internet Service Provider] somewhere, the ISP gets paid, the ISP has credit card or other identification details. That's exactly what we did with the young student who pretended to be Dennis Eck on the web." However, Hotcopper's managing director, Mr Mike Vallender, said the regulator was not being tough enough. "ASIC says the chat sites are too hard to regulate or moderate," Mr Vallender said. "These chat sites should be scrutinised." The internet has also led to a resurgence of scams such as "pump and dump" schemes where stocks are hyped using e-mail. In one case in the United States, a small group sent out over a million e-mails urging investors to buy a particular tech stock. In another instance, fraudsters, who were eventually prosecuted in the US, set up a phoney MLC web site that raised $750,000 from investors before being closed down by ASIC and the US regulator, the Securities and Exchange Commission. However, Mr Rodgers said: "We don't think the risk of 'pump and dumps' ought to mean we clamp down on internet discussion sites so hard that they really don't become a vehicle for people to swap information. "We also didn't want to put site operators in an awkward position where they were demanding credit card details ... that raises privacy issues for users." Mr Brad Ware, a portfolio manager at Investors Mutual which owns the InvestorWeb chat site, said stock ramping was occurring well before the internet was introduced. "The licensing of discussion sites should not be required as it is very difficult to police information," Mr Ware said. "In Australia, people have the right to freedom of speech, people will say what they want." with Sean Alymer afr.com.au ===== View the Press Release "ASIC Releases Interim Policy for Internet Discussion Sites" asic.gov.au View the Draft: "Interim Policy Statement - Exposure Draft: Internet Discussion Sites": cpd.com.au