ASX COMPLIANCE UPDATE

02 Apr ASX COMPLIANCE UPDATE

Yesterday the ASX yesterday published a Compliance update that acknowledges the challenges for listed entities arising from COVID-19 and provides practical guidance on topics such as disclosure, changes to capital raising rules and advice on earnings guidance.

Key points include:

• Continuous disclosure obligations do not extend to ‘predicting the unpredictable’
  • “ASX does not expect listed entities to announce information under listing rule 3.1 that comprises matters of supposition or that is insufficiently definite to warrant disclosure and that otherwise meets the requirements of all three limbs of listing rule 3.1A, mentioned above. Nor does ASX expect listed entities to make forward-looking statements to the market unless they have a clear and reasonable basis for doing so.”
• Companies are urged to review earnings guidance
  • “Entities that haven’t reviewed their published guidance in light of COVID-19 are strongly encouraged to do so and, if it is no longer current to update it or, perhaps more sensibly for most entities in the current highly uncertain climate, to simply withdraw it.”
• Reminder to disclose:

• • Operational decisions, such as suspending facilities or standing down staff, that are likely to have a material impact
  • Capital raisings as soon as a company is committed to proceeding with a raising
  • Changes to dividends including changes to previous stated intentions to pay dividends
  • Appendix 4C or 5B form for quarterly reporters

• Introduction of temporary emergency capital raising measures
  • Companies are permitted to request two consecutive trading halts allowing 4 days to consider, plan and execute a capital raising
  • Temporary uplift in the 15% placement to 25% if companies make a follow-on pro-rata entitlement or follow-on offer to retail investors to ensure all shareholders can participate in a capital raising at the same or lower price than those participating in a placement
  • Waiving the one-for-one cap on non-renounceable entitlement offers
• Support ASIC’s ‘no action’ position on upcoming AGMs
  • ASIC’s ‘no action’ on AGM guidelines (link)
  • GIA / AIRA / LCA guidance on COVID-19 and impacts on AGMs (link)
• Requests for reporting relief for listed entities with 30 September, 31 December or 31 March balance date to be looked at on a case by case basis.
• Stern warning to companies who make misleading claims around COVID-19 and a reminder that where the ASX has concerns over a COVID-19 related announcement, it is likely to immediately suspend trading in the entity’s securities pending further enquiries.