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- The House of Representatives Standing Committee on Economics has called for more transparency in regards to the holdings and behaviours of institutional investors
- The committee warned capital ownership is becoming more concentrated in Australia and is damaging competition
- It suggested financial regulators should actively monitor capital concentration and common ownership
- Committee Chair Jason Falinski said it is important to take action now to avoid a larger issue in the future
A Federal Parliament committee has called for more transparency in regards to the holdings and behaviours of institutional investors.
The House of Representatives Standing Committee on Economics tabled a report today on the implications of common ownership and capital concentration in the corporate world in Australia.
It suggested the need for financial regulators to actively monitor capital concentration and common ownership.
Common ownership is when an investor owns shares in competing businesses.
Capital concentration occurs when large institutional investors dominate markets and thereby influence the behaviour of companies.
The committee warned capital ownership is becoming more concentrated in Australia and is damaging competition.
Committee Chair Jason Falinski said it is important to take action now to avoid a larger issue in the future.
“If financial markets are dominated by a small number of large investors, or if the same investor owns a significant stake in competing businesses, the evidence is piling up that competition suffers,” he said.
“That can lead to higher prices, lower quality goods and services, and lower relative wages— all of which are serious concerns.
“Further, the concerns of capital are not necessarily the same as the concerns of people, it is not just as consumers that we suffer, but also as employees, investors, voters, citizens and human beings.”
