Most Read Contributor in New Zealand, September 2016
New Zealand companies dual-listed on ASX, or wanting to
dual-list in future, will face fewer compliance costs under
proposed changes to the ASX Listing Rules.
The amendments will allow companies listed on the NZX Main Board
to be recognised as ASX Foreign Exempt entities, with the effect
that the NZX Main Board rules will primarily apply – rather
than both the NZX and ASX rules.
New Zealand's current
39 dual-listed companies have a double compliance burden
– a bit like driving a car and having to comply with two road
ASX put the proposals out for consultation in March and
yesterday released its
response. Fifteen submissions
were received, several of them from New Zealand, including one from
Chapman Tripp. The Listed
Companies Association submission was endorsed by 17 NZX listed
ASX has submitted the rule changes to ASIC for regulatory
approval, with a response required within 28 days. The very strong
expectation is that ASIC will approve them without amendment. ASX
has signalled they will be implemented as soon as possible after
ASIC has ticked them off. This means that they could be in place
within a month.
Eligible companies will still need to apply for Foreign Exempt
Issuer status but ASX says the process will be straightforward and
will not incur fees. ASX will write to all affected entities to
explain what is involved. Companies will still need to register as
a foreign corporation in Australia (a change from the initial
Chapman Tripp comments
Obviously this move is to be welcomed as it gives New Zealand
corporates easier access to the much larger Australian capital
market. In colloquial terms, ASX appears to be saying to New
Zealand firms: "Where the bloody hell are you?"
But it is also in some ways a blast from the past as it returns
us to the position which applied about 15 years ago before ASX
changed its rules so that only the largest NZX companies
The playing field is still not completely level. NZX-listed
companies which elect to become exempt foreign entities will not
have access to the "low doc" options available under
sections 708A and 708AA of the Corporations Act (rights issues and
sales offers that do not need disclosure).
ASIC has indicated to ASX that, while it cannot currently
progress an application for class relief for such companies, it
will be prepared to consider individual applications on their
merits. Pending such a change New Zealand companies could consider
using a short form Product Disclosure Statement, under forthcoming
changes to the FMC Regulations, and extending it into Australia
under the Trans-Tasman Mutual recognition regime.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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