On 16 September 2012 ASX released for public discussion proposed revisions to Listing Rule Guidance Note 8 (Continuous Disclosure: Listing Rule 3.1). These revisions have been undertaken in an effort to assist ASX listed entities in the understanding of their continuous disclosure obligations under the Listing Rules. The revised guidance note, which has been released in conjunction with minor changes to Listing Rules 3.1 and 3.1B, provides enhanced guidance in a number of areas. These include:
- The test for determining the materiality of information. The revised guidance note explains how ASX interprets and applies the test under section 677 of the Corporations Act when determining the market sensitivity of information for the purposes of the Listing Rules;
- The meaning of immediately. The revised guidance note clarifies that “immediately” does not mean “instantaneously” but rather “promptly and without delay”. It also sets out those factors that ASX will take into consideration when assessing whether an entity has complied with its information disclosure obligations;
- The use of trading halts to manage disclosure issues. ASX clarifies how trading halts can be used by listed entities to manage their continuous disclosure obligations and confirms ASX’s existing practice that it will invariably grant a trading halt to an entity which engages with ASX and requests extra time to prepare and issue a market sensitive announcement;
- Practical hints to manage an entities disclosure obligations. ASX includes a section with a list of steps that entities can follow to manage their disclosure obligations under Listing Rule 3.1;
- What constitutes a false market. ASX provides greater guidance as to what constitutes a false market for the purposes of Listing Rule 3.1B and outlines how ASX deals with specific situations where that rule is commonly invoked;
- Specific disclosure issues. ASX provides further guidance on how entities should deal with “earnings surprises”; and
- The application of the carve outs to disclosure in LR 3.1A. ASX provides further guidance on the requirements that need to be met to utilise the exception from immediate disclosure in Listing Rule 3.1A – including more information and guidance on what constitutes an incomplete proposal or negotiation, the requirement for confidentiality and the “reasonable person” test.
Given the lengthy and detailed revisions to the guidance note ASX is also proposing to issue a more concise guide to continuous disclosure entitled “Continuous Disclosure: An Abridged Guide”. This guide has been drafted specifically as an aid to directors and other officers of listed entities as opposed to legal professionals or other professional advisers.
To download a copy of the ASX Public Consultation Paper click here.
Comments to ASX on the proposed changes can be made anytime up to 30 November 2012.