Seven things ASX-listed companies need to do to comply with new listing rule amendments

The ASX has rewritten many of the listing rules and accompanying guidance with changes coming into effect on 1 December 2019.

What you’ve done for many years may no longer be correct. Many of the standard formats for announcements, quarterly reports and notices of meeting will need to be updated and some rules for issuing capital have been revised. However, there is good news as ASX will be moving to ‘smart forms’ and plenty of annoying inconsistencies and uncertainties have been addressed.

We also expect that the changes will see a slight shift in the way ASX interacts with listed entities.  While early engagement with ASX is still encouraged, standard matters are now covered by guidance notes. They provide more certainty on how ASX will interpret various listing rules and clarity on what ASX’s expectations are for many documents lodged with ASX.   The changes also give ASX enhanced powers to gather information, monitor compliance and enforce breaches.

Read on to learn about some of the things to consider now to prepare for the new amendments.

Update your announcement format

Check existing templates for market announcements to ensure they comply with the new requirements. From 1 December 2019, announcements must include the entity’s name, address and corporate logo and identify the body (such as the Board or disclosure committee) or name and title of the officer (such as the Company Secretary) who authorised the announcement. The contact details of a person who investors can contact if they have any questions regarding the announcement must also be included.

Use the updated quarterly report format

The quarterly report forms have changed. The new forms should be used for the quarter ending 31 March 2020.  Quarterly reports must be promptly lodged with ASX after approval (usually by the Board) – you can’t hold it back once approved.   

There are also a few new requirements for start-ups and “commitment entities”.  For example, those that currently lodge an Appendix 4C quarterly cash flow report, must now also lodge a quarterly activities report with ASX.

New notices of meeting requirements apply

When seeking approvals required by the listing rules, your meeting documents must now summarise relevant listing rules and explain the consequences of a resolution passing or not passing. The ASX has provided some standard text to assist with this. These changes apply to notices of meeting despatched from 1 December onwards.  

Minimum content requirements now apply for certain resolutions, including approval or ratification of share issues (such as providing the names of recipients of shares where this is likely to be material to shareholders) and related party transactions (such as remuneration details when seeking approval for the grant of equity incentives to executive directors).  

The form of voting exclusions to be included in the meeting documents has also changed in order to provide greater consistency and certainty. The standard wording used in the past will no longer be adequate.  

It’s time to get ‘smart’ and use the new forms

ASX has made very ‘smart’ changes to some familiar forms, including Appendix 3B. There are also two new forms to use when advising of new share issues. Which one to use depends on the circumstances of the new issue.  

The Appendix 3B is a ‘smart form’ which means you need to be smart enough to complete it online (at ASX Online) and it will remove inapplicable questions based on your inputs.  The ASX aims to move most of the commonly used forms to smart forms over time. So, it’s time to change procedures as the old precedent Appendix 3B document won’t work after 1 December.

Recalculate your 15% share placement capacity

The ASX has clarified the rules for calculating a company’s 15% placement capacity in listing rule 7.1 and, if the entity is not within the S&P/ASX 300 Index, its additional 10% placement capacity in listing rule 7.1A.   While the changes seek mainly to clarify the calculations, they are reasonably extensive so if these thresholds are relevant you should recalculate your capacity using the new worksheet provided by the ASX.  Your placement capacity may have changed slightly due to the amendments.  

Understand applicable changes to corporate action timetables

There are new timetables for a range of corporate actions made from 1 December and the periods for many corporate actions have been reduced - sometimes by five business days. The timetables apply to a broad range of corporate actions including record dates, payment dates, interest payment dates and quotation periods.  

There are other changes too

This is a high level summary only and does not include details of all of the changes to the ASX listing rules.  

There are a range of additional changes which are ‘tidy ups’ or will apply to certain entities or for certain types of actions or transactions.   For instance, dual listed companies with CDIs must now notify the ASX on a monthly basis of the number of CDIs on issue and certain underwriting arrangements will now require specific disclosures, such as termination events.

If you have any questions about whether changes apply to you or what you need to do to comply please contact us.  

The changes take effect on 1 December 2019 – make sure you’re ready!

This article was originally co-authored by Robert Franklyn.