Update to ASX Guidance on Continuous Disclosure
Corporate News - 05 March 2020
ASX has recently released an update to its policy with respect to the continuous disclosure requirements applicable to listed entities. The updated policy includes further guidance with respect to naming counterparties to market sensitive contracts and announcing satisfaction of performance milestones attaching to securities.
It has been ASX policy for some time to require that listed entities name counterparties to material contracts in market announcements. The additional guidance provided by ASX relates to the very limited circumstances in which ASX may permit a company to include a description of a counterparty rather than the counterparty’s name in its market announcement.
It is clear from the ASX guidance that commercial sensitivities of the counterparty alone are unlikely to result in ASX agreeing that the counterparty does not need to be named in a market announcement. As examples, ASX has referred to government agencies and entities involved in the defence or security industries as counterparties that may not need to be named in market announcements. The updated guidance serves as a reminder that listed entities should consider the disclosure requirements of a market sensitive contract at the outset of negotiating, rather than having the requirement to disclose the counterparty impede execution of a contract after negotiation has taken place.
ASX has also indicated that the satisfaction of a milestone that triggers a conversion of incentive securities into a material number of ordinary shares is likely to constitute price sensitive information that will need to be disclosed by a listed entity as market sensitive information.
Disclaimer: Please note that this publication is intended to provide a general overview of the matters to which it relates. It is not intended as legal advice and should not be relied on as such. Formal legal advice should be sought in respect of any matters of interest arising from this publication. Copyright © 2020 Steinepreis Paganin.