From 31 March 2017, ASX will no longer be agreeing to requests by a listed entity for a trading halt to help facilitate a bookbuild process for a sale by an existing security holder of a major stake in the entity.
ASX has in the past agreed to such requests, with the trading halt typically lasting for the period needed by the seller to complete the sale and for the entity to announce the final sale price to the market (up to the maximum period permitted for a trading halt of 2 trading days).
The change reflects the general principle outlined in Guidance Note 16 Trading Halts and Voluntary Suspensions that interruptions to trading should be kept to a minimum and that a trading halt should only be permitted where there is a material risk that trading in a particular security might occur while the market as a whole is not reasonably informed or where it is needed to correct or prevent a false or disorderly market.
Where an entity is not given forewarning of a security holder's intention to sell a major stake in the entity before a disclosure obligation arises, ASX may agree to a request by the entity for a trading halt to allow it sufficient time to meet its disclosure obligations and to make an announcement about the sale. However, the period of the halt will only be as long as is necessary for the entity to make the announcement.
For the avoidance of doubt, this change in policy does not affect ASX's preparedness to grant trading halts to facilitate significant capital raisings by listed entities.
An update to Listing Rules Guidance Note 16 has been published on the ASX website reflecting the changed policy above.
See also ASX compliance update dated 31 March 2017.