The Australian Securities and Investments Commission (ASIC) is preparing a submission to Treasury seeking changes to Australia's takeover laws which ASIC chairman, Greg Medcraft, today labelled as "an anachronism" that is allowing "takeover by stealth".

Speaking on ABC's AM program Mr Medcraft made his strongest argument yet that the current provisions are not in the interests of investors.

"It is basically allowing takeover by stealth which I think is inconsistent with the takeover law in terms of making sure that all investors particularly Australians when there is a change of control and there is a premium to be paid that all parties can share in that," Mr Medcraft said.

Mr Medcraft said ASIC has spoken to Treasury and will be making a written submission to the government department about these issues.

A spokesman for Bernie Ripoll, Parliamentary Secretary to the Treasurer said: "The Treasury will obviously need to consider ASIC's recommendations in detail and provide advice to the Government, but of course the Government takes any recommendations from Mr Medcraft or any of our financial regulators very seriously".

The issues has hit the headlines thanks to recent raids by Australian billionaires, James Packer, and Gina Rinehart, on prominent listed companies including BusinessDay publisher, Fairfax Media.

Mr Packer successfully agitated for a change of chairman at rival casino operator, Echo Entertainment, but has failed to secure a board seat after grabbing a 10 per cent stake and seeking permission to lift his investment to as much as 25 per cent of the company.

Mrs Rinehart has sought board seats in recognition of her stake in Fairfax which is currently 15 per cent.

Mr Medcraft cited the UK's "put up or shut up" which means would-be suitors need to be very clear and committed if they are going to make a takeover offer.

When questioned on what specific changes he was looking at Mr Medcraft said he would seek a government review of the creep provisions and clarification of the current rules in relation to mounting a takeover.

ckruger@smh.com.au