Dentons

There are 171 pages of ASX Listing Rules changes, five amended Appendix Forms, six new Guidance Notes and 12 updated Guidance Notes which largely come into effect on 1 December 2019. Please refer to our earlier articles Proposed changes to the ASX Listing Rules, and Amendments to ASX Listing Rules to take effect 1 December 2019 for more background information on the amendments to the ASX Listing Rules.

Before the amendments to the ASX Listing Rules come into effect on 1 December 2019, we strongly encourage all entities listed on ASX or wishing to list on ASX to consider the following practical steps they can take to prepare for the changes:

  1. Market Announcements: Entities should include a covering letter which discloses the entity’s name, address and corporate logo. The announcement must be dated and identify the title of the entity, and name and title of the officer who authorised the document to be given to ASX. If the announcement relates to Listing Rule 3.1, the announcement must include the name, title and contact details of the person who security holders or other interested parties can contact if there are queries.
  2. Quarterly Reports: Listing Rules 4.7B and 5.5 have been amended to require a quarterly cash flow report to be lodged “… immediately the information is available for release to the market” – that is, when it has been properly compiled, verified and approved. Entities should familiarise themselves with updated Guidance Note 23 ‘Quarterly Cash Flow Reports’, Listing Rule 4.7B to 4.7C or 5.1 to 5.5 (as applicable), create or update a template for quarterly activity reporting and update Quarterly Cash Flow Report template for new Appendix 4C or Appendix 5B.
  3. Issuing new Securities: Entities should acquaint themselves with new Appendices 2A and 3G, and amended Appendix 3B ‘New issue announcement, application for quotation of additional securities and agreement’. Appendix 3B will now be available as a smart form on ASX Online. If the issue of securities is underwritten, consider the new disclosure requirements around underwriting (including name of underwriter, extent of underwriting, fee or commission payable and summary of significant events that could lead to termination).
  4. Notices of Meeting: There is a revised table of voting exclusions in Listing Rule 14.11.1. Entities must disclose the closing date for receipt of director nominations in notices for meeting. 
  5. Voting by poll: All resolutions relating to Listing Rules must be decided on a poll rather than show of hands.
  6. Next General Meeting: Entities should read Guidance Note 35, note that all Listing Rule resolutions must be decided by poll and update the template for disclosure of voting results to reflect changes to Listing Rule 3.13.2. A sample template for disclosure of voting results is available at https://www.asx.com.au/regulation/compliance/compliance-downloads.htm. If an entity is not an externally managed trust and directors may be elected at a meeting of security holders, the entity must tell ASX the date of the meeting and the closing date for receipt of nominations from persons wishing to be considered for election as a director, at least five business days before the closing date for receipt of such nominations. 
  7. Next AGM: A copy of the CEO and Chair’s speeches must be lodged before the AGM. Entities should disclose the closing date for receipt of director nominations and all decisions must be decided on a poll. 
  8. Escrow: A two-tier regime for escrow will be introduced in which significant holders (such as related parties, promoters, substantial holders (10 percent or more), vendors or classified assets and their associates) must execute formal restriction deeds whereas other holders will be given restriction notices. ASX will allow entities to rely on a provision in their constitution containing the restrictions on transfer and the imposition of a holding lock on their securities.
  9. Amending Constitution: Entities should also consider whether to introduce Listing Rule 15.12 escrow provisions into its Constitution to state that “…restricted securities cannot be disposed of during the escrow period except as permitted by the listing rules or ASX”.
  10. New Listings: New forms must be used for all listing applications (Appendix 1A) lodged on or after 1 December 2019. There are changes to Listing Rule 1.1 listing conditions; example good fame and character requirement for new listings extend to non-director CEOs and CFOs. If an entity wishes to list using the assets test, the entity should carefully read revised working capital test in Listing Rule 1.3.5 and the new definition of “working capital”, or if an entity wishes to list using the profits test, entities should refer to changes to Listing Rule 1.2.6. For listing applications lodged on or after 1 July 2020, persons responsible for communication with ASX in relation to Listing Rule matters will need to complete an approved education course and examination covering Listing Rule compliance matters.

Please note that the above list is not an exhaustive list of the changes to the ASX Listing Rules.

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