What do I have to disclose? Continuous disclosure obligations in a COVID-19 environment

Satisfying your continuous disclosure obligations in a COVID-19 environment

As the COVID-19 crisis deepens, many of our listed clients have reached out to discuss their continuous disclosure obligations to the market and their shareholders. The requirement for disclosure is set out in ASX Listing Rule 3.1 and arises when an entity “is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price of value of the entity’s securities”. This disclosure obligations is also balanced against the disclosure exceptions contained in Listing Rule 3.1A.

Whilst the test may appear simple, disclosure – how much, what and when – is often a complex issue as it is an ongoing assessment in the entity’s particular circumstances. Many of the ASX announcements made to date concerning COVID-19 have to do with previously released earnings guidance (a suspension, withdrawal or downgrade), but have also covered general business updates, staffing, cost reductions, supply chain disruptions and impacts on material contracts.

We recommend that all entities undertake some form of financial modelling, business continuity planning and risk assessment that will in turn be used for appropriate market disclosures and provide a reference framework for the entity to rely on and refer to through the pandemic.

Should you wish to discuss your continuous disclosure obligations or have any other queries about your obligations as a listed entity during the COVID-19 crisis, please don’t hesitate to contact 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.

Tom Sapountsis