Shareholders to benefit from sweeping changes to ASX listing rules
Long-suffering shareholders will enjoy a small win from December onwards under changes the ASX is making to its listing rules to “enhance market quality”.
The ASX released a statement on Thursday outlining its response to community consultation on the integrity and efficiency of the ASX listing rules.
The bourse has been cracking down on companies with loose interpretations of the rules over the past year — its general manager media and comms Matthew Gibbs told Stockhead in April lower number of price and disclosure queries by the ASX reflected higher levels of compliance with ASX rules and guidance by listed entities.
ASX continuous disclosure rules require companies to release price-sensitive information — news that a ‘reasonable person’ would say could have an impact on that company’s share price — immediately to the market once it becomes aware of that information.
Last year, following scandals from companies like GetSwift (ASX:GSW) and the now-defunct Big Un which revealed they had misled investors, the ASX tightened the disclosure laws, meaning businesses had to provide greater detail in their announcements.
The ASX will provide “more guidance and direction on the information that should be given to shareholders in notices of meetings” as well as requiring companies to provide more consistent reporting of voting outcomes.
It spruiked “new measures” to address breaches of the listing rules and inappropriate behaviours by promoters and professional advisers in new and back door listings, and a spokesman confirmed it would have “the power for ASX to censure listed entities for breaches of the listing rules and a power to require information given to ASX to be confirmed under oath”.
“In addition, warnings to promoters and professional advisers state that if they and their family, friends and associates take up cheap shares ahead of listing, ASX may reject the listing or treat them as promoters and escrow their shares for two years after listing,” the ASX told Stockhead.
From the start of 2021 financial year, company secretaries appointed responsible for communicating with the ASX about the listing rules will have to complete an approved education course and exam. The new rules come into effect from December 1 this year, and the bourse is holding education roadshows in Melbourne, Adelaide, Brisbane, Perth and Sydney.
The ASX’s full 63-page consultation response can be accessed here.