ASX has implemented new timetables which reduce the period for traditional rights issues and new standard timetables for accelerated entitlement offers. The new timetables came into effect on 14 April 2014.
Summary of changes
The timetable for traditional rights issues has been reduced from 26 business days to 19 business days. The new timetable for traditional rights issues encompasses the following changes:
- A reduction in the period from the ex date to and including the record date from 5 business days to 3 business days.
- A reduction in the period from the day after the record date to and including the date that documents are sent to shareholders from a maximum of 4 business days to a maximum of 3 business days.
- A reduction in the period from the day after the documents are sent to shareholders to and including the date that applications for participation in the rights issue close from a minimum of 10 business days to a minimum of 7 business days.
- A reduction in the period from the day after the date that applications for participations in the rights issue close to and including the issue date from 6 business days to 5 business days.
Three new standard timetables have also been introduced to Appendix 7A of the ASX Listing Rules to apply to the following types of non-traditional or accelerated rights issues:
- Accelerated non-renounceable entitlement offers (ANREOs).
- Accelerated renounceable entitlement offers (AREOs) and simultaneous accelerated entitlement offers (SAREOs).
- Accelerated renounceable entitlement offers with retail rights trading (AREORTs).
The new timetables will, in most cases, eliminate the requirement to obtain waivers from ASX for most accelerated rights issues and are consistent with current timetables conducted on the basis of waivers.
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The following table provides an overview of the new timetables in the Listing Rules for accelerated rights issues.
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What are some of the implications?
Less waivers required
Accelerated rights issues have previously required a number of waivers from the Listing Rules, such as waivers from thetimetables for corporate actions and waivers from Listing Rule 7.1 and Listing Rule 10.11(where the accelerated rights issue do not constitute a traditional rights issue for the purposes of the respective rights issue exceptions).
The new timetables for accelerated rights issues should eliminate the need for many issuers to obtain waivers of the Listing Rules for most accelerated rights issues, making the process for accelerated rights issues more efficient for listed entities.
The benefit of these changes has been extended to all rights issues and generally to related issues (as defined in the Corporations Act and as amended by ASIC class order 08/35).
More efficiency through shortened maximum time period
As the maximum time periods have been shortened in the entitlement offer timetables, issuers are effectively required to find process efficiencies to comply with the shortened time periods where they would have otherwise relied on the longer maximum time periods.
Benefits of the changes
The principal benefits of the recent changes to the Listing Rules are:
- A more timely and efficient process for rights issues, leading to a reduction in the time to market of rights issues and a reduction in market or execution risk for listed companies and investors.
- There will be less ASX waivers required by listed companies before implementing certain accelerated rights issues than previously required.
As these changes took effect on 14 April 2014, all applicable rights issues or corporate actions will now be subject to the new timetables contained in the revised ASX Listing Rules.