A crackdown by the ASX on continuous disclosure obligations appears to be working, with ASX queries falling in number compared with this time last year, according to the latest ASX monthly report.

With one quarter left in FY19, there have been 313 letters sent by the ASX to companies regarding their disclosure practices, a 35 per cent fall compared with March 2018.

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.

And though some felt those rules had gone too far, it appears to be working.

Continuous disclosure queries have fallen 20 per cent from 191 to 152, price queries have nearly halved, dropping from 226 to 114 and aware letters have fallen 24 per cent to 47.

Matthew Gibbs, general manager media and comms at the ASX, told Stockhead its tighter watch was one of several factors at play.

“It is fair to say that a lower number of price and disclosure queries by ASX does, in part, reflect higher levels of compliance with ASX rules and guidance by listed entities (i.e. the market is well-behaved and better informed about its obligations),” he said.

“But it also reflects market conditions. In less volatile times, less alerts are generated by our surveillance monitoring, resulting in less ASX queries about unexplained or out-of-the-ordinary price or volume movement.”

Other figures released by the ASX for the month of March reveal:

  • Only four companies joined the list in March, and 86 in the year to date, both falls on the prior corresponding periods.
  • Company delistings have risen 60 per cent this financial year, from 60 to 96.
  • March saw $5.3 billion in capital raised, an eight per cent drop on last March, though capital raised in the year to date is up 22 per cent to $68.8 million.
  • Daily trade volumes rose 27 per cent compared with March last year, while the value of those trades was $5 billion, up 14 per cent.

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