ASX updates to Guidance Note 1

Corporate News - 23 November 2017

ASX has released an updated version of Guidance Note 1 (Applying for Admission – ASX Listings) (Guidance Note 1) effective 1 December 2017. Companies that are considering applying for listing should be aware of the following key changes (amongst others) to Guidance Note 1.

  (Financial Account Requirements): Guidance Note 1 has clarified the accounts requirements under the ASX Listing Rules and under ASIC Regulatory Guide 228 Prospectuses: Effective disclosure for retail investors. Annexure B contains a table which illustrates the accounts that an applicant for listing will be required to provide to ASIC and ASX in fourteen common scenarios, including where an entity acquires assets or a business prior to listing.

  (Minimum Spread Requirements): As outlined above, where an entity has a substantial number of proprietary companies on its share register, ASX may require company searches for each proprietary company to determine whether they are related to or associated with another shareholder on the register. Entities applying for listing should be aware of this requirement as the ASX will not list a company until it is satisfied that the entity has achieved the minimum spread requirements.

  (Director good fame and character): ASX has clarified that it will not waive its “good fame and character” requirements. If an applicant is not able to provide the required documents for a director or proposed director and it wants to proceed nonetheless with its listing, in the case of an existing director, that director must resign, and the entity must provide a written undertaking that it will not re-appoint that person as a director; or, in the case of a proposed director, the entity must provide a written undertaking to ASX that it will not appoint that person as a director.

  (Working Capital Requirements): ASX has clarified and provided more detailed guidance on the working capital requirements an entity seeking admission under the assets test must meet. In particular, ASX has stated that if it has concerns about the accuracy or basis of an entity’s working capital statement included in a company’s prospectus, ASX may require the statement to be confirmed by an independent expert or it may refuse to admit the applicant to the official list.

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