All listed entities must have Securities Trading Policies from 1
January 2011, and report on their gender diversity targets and
progress, and the composition of their Remuneration Committee (if
any) from 2011.
Are you keeping track of all the ASX's new Listing Rule and
corporate governance changes? Here's our concise guide.
Securities Trading Policies
Securities trading policies are currently covered by ASX's
non-mandatory corporate governance Recommendations. However, from 1
January 2011, all listed entities will need to have a Securities
Trading Policy which complies with minimum content requirements
imposed by ASX. ASX has also released a detailed Guidance Note to
supplement these new Listing Rules.
The most significant requirement is that Securities Trading
Policies must contain blackout periods for key management
personnel. Those blackout periods are not mandated by ASX -
companies can determine what is appropriate in their circumstances.
In addition, through both the Listing Rules and the Guidance Note,
ASX is imposing a framework for permitted trading during blackout
periods (eg. participation in rights issues) and exceptional
circumstances authorisations to allow trading during a blackout
period (eg. severe financial hardship).
Each Securities Trading Policy will also need to be formally
released to the market (rather than being placed on the company
website as per the current corporate governance
All listed entities should review their current Securities
Trading Policy, to determine whether it needs to be amended before
If a new or amended Policy is to be implemented, consideration
should be given to Board approval processes and internal education
before the "go-live" date of 1 January 2011
All listed entities will have to address diversity issues in
their corporate governance reports for financial years beginning on
or after 1 January 2011. Early transition is
Under the new corporate governance Recommendations:
Diversity Policy - Listed entities should
establish a Diversity Policy. Diversity includes gender, age,
ethnicity and cultural background.
Establish and assess objectives - The Policy
should require the Board to establish measurable objectives for
achieving gender diversity and to assess annually both the
objectives and the entity's progress in achieving them.
Annual reporting on objectives - Listed
entities should disclose in each annual report the measurable
objectives for achieving gender diversity which have been
established, as well as the entity's progress in achieving
Annual reporting on gender diversity - Listed
entities should disclose in each annual report the proportion of
women employees in the whole organisation, women in senior
executive positions and women on the Board.
Under the "if not, why not" rule, companies which
don't adopt the new Recommendations in full must explain why
they have not done so.
Each listed entity should consider whether to adopt these new
If the Recommendations are adopted, the entity should start the
process of preparing a Diversity Policy and setting appropriate
objectives for achieving gender diversity. Establishing a workable
and meaningful Diversity Policy which is tailored for each
entity's circumstances, as well as sensible objectives which
the entity is committed to achieving, will not be a "tick the
Two changes here - one affecting all listed entities, the other
only affecting entities in the S&P/ASX 300.
Every listed entity will need to report on whether its
Remuneration Committee (if it has one) has at least three members,
is composed of a majority of independent directors and is chaired
by an independent director. This will form part of all corporate
governance reports for financial years beginning on and after 1
In addition all listed entities in the S&P/ASX 300 index
will be required to have a Remuneration Committee from 1 July 2011.
That Remuneration Committee must be comprised solely of
non-executive directors. Any entity in the S&P/ASX 300 index at
the start of its financial year must comply with this requirement
for the entire financial year, even if it is removed from the index
during the course of that financial year.
Listed entities, especially those in the S&P/ASX 300, need
to consider the composition of their Remuneration Committees.
S&P/ASX 300 companies need to pay
particular attention to the different "tests" under the
Listing Rules and the Recommendations - an independent director
will be a non-executive director, but a non- executive director
will not necessarily be an independent director
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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