A Quick Refresher: recent changes to the ASX Listing Rules

On 1 December 2019 ASX implemented substantive changes to its Listing Rules. The changes cover a range of areas including compliance, corporate governance and disclosure.

The below summarises what, in our view, are the most significant changes affecting our listed clients on a day-to-day basis, particularly as we start to both manage the changes and receive feedback from our clients.

This is not an exhaustive list of all the changes – if you require further advice or clarification on any of the changes, please don’t hesitate to contact our office. The key changes are set out below:

1.Improving market disclosures and other market integrity measures:

(a) a new quarterly activity reporting format has been adopted under new Listing Rule 4.7C;

(b) for mining exploration and oil and gas exploration entities, there are now additional quarterly reporting disclosure requirements including a requirement to provide an explanation if an entity’s cash flow is materially different from its estimated cash flows for any quarter; and

(c) Listing Rule 15.5 has been amended to require market announcements to identify the title of the body or the name and title of the officer of the entity who authorised the document to be given to ASX. ASX has provided various examples of what is and is not sufficient to satisfy the new requirements, such as:

  • (i) if the company secretary or other officer authorises the release, it is    sufficient to have a sign-off clause stating the name and title of the officer and that they are authorised to release the document to market, for example:

Authorised by

Susan Johnson

Company Secretary

  • (ii) if a body rather than an individual officer authorises the release (e.g. the Board or a committee of the Board), it is sufficient to include a statement that the relevant body authorised the release of the document to the market, for example:

This announcement is authorised by the Disclosure Committee

  • (iii) a name of a company officer alone is not sufficient; and
  • (iv) in the case of a notice of meeting, a concluding statement such as “By order of the board” or similar will suffice for the purposes of the Listing Rule 15.5.

2. Making the Listing Rules simpler and easier to follow:

(a) amendments have been made to Listing Rules 2.7, 2.8 and 3.10.3 along with certain appendices, whilst new Listing Rules 3.10.3A, 3.10.3B and 3.10.3C have been introduced along with a new Appendix 2A which affect the manner in which entities announce issues of securities and seek their quotation;

(b) amendments made to Listing Rule 7.5 allow a listed entity to have an agreement to issue securities ratified by security holders under Listing Rule 7.4;

(c) amendments made to Listing Rule 10.1 attempt to deal more appropriately with agreements to acquire or dispose of substantial assets;

(d) amendments and clarifications to the definitions of “substantial holder” (from 5% to 10% to mirror the Corporations Act), “associate” (to better differentiate between the associates of a natural person and an entity) and “related party” (to incorporate by reference the provisions of sections 208 and 601LA of the Corporations Act); and

(e) a variety of standard forms have been removed from the ‘Appendices’ section of the ASX website and made available only on ASX Online including Appendices 1A, 3A.3, 3B, 3X, 3Y, 3Z, 4C, 4G and 5B.

3. Security holder meetings:

(a) revisions to Listing Rule 3.13.1 have amended the regime around providing notice to ASX of closing dates for the receipt of director nominations ahead of annual general meetings;

(b) ASX now requires all Listing Rule resolutions to be decided by poll at general meetings (rather than by a show of hands) and Listing Rule 3.13.2 implements new and additional requirements for the disclosure of voting results;

(c) Listing Rule 3.13.3 now requires a copy of any CEO address (along with the Chair’s) to be lodged with ASX prior to the relevant general meeting; and

(d) substantial changes have been made to the voting exclusion statements required for notices of meeting by Listing Rule 14.11.1.

 4. Updating the timetable for corporate actions:

(a) ASX has updated the timetables set out in Appendices 3A, 6A and 7A, the changes to which include:

  • (i) pursuant to a new clause 5.3 to Appendix 6A, entities will now not be required to send a notice to holders of quoted options that are about to expire where the options are substantially out of the money (defined by a set formula);
  • (ii) a shortening of the period for applying for quotation of securities issued upon the conversion or expiry of convertible securities from 15 to 5 business days after the relevant conversion or expiry date; and
  • (iii) updating the Security Purchase Plan timetable in section 12 of Appendix 7A.

 5. Changes to Guidance Notes:

(a) Guidance Note 12 – substantial changes have been made around the process for announcing a transaction involving a significant change to the nature or scale of its activities;

(b) Guidance Note 21 – now houses work sheets to calculate an entity’s remaining placement capacity under Listing Rules 7.1 and 7.1A, which no longer form part of the Appendix 3B;

(c) Guidance Note 25 – changes have been made which intend to assist listed entities to understand and comply with the framework in Listing Rules 10.11 – 10.16 around issuing securities to persons in a position of influence; and

(d) Guidance Note 33 – to reflect ASX’s policy to automatically remove an entity from the Official List if an entity:

  • (i) fails to lodge any Listing Rule 17.5 document for a continuous period of 1 year after the deadline for lodgement of that document; or
  • (ii) if the entity’s securities have been suspended from trading for a continuous period of 2 years.

Should you have any queries or concerns we would be happy to discuss any of the recent changes made to the Listing Rules with you, or provide any advice in respect of your upcoming transaction/s.

Should you wish to contact us, please don’t hesitate to telephone Alfonso Grillo or David Woodford of our office on 03 8621 8888 or reach them by email at agrillo@grillohiggins.com.au or dwoodford@grillohiggins.com.au, respectively.