Australia: Recent Amendments to the ASX Listing Rules – How Much Can Small and Mid Cap Companies Raise Without Shareholder Approval? … and What Does it Now Take to Become an ASX Listed Company?

Last Updated: 6 August 2012
Article by David Selig and Kristy Dixon

Executive summary

  1. With effect from 1 August, 2012, an entity with a market capitalisation of $300 million or less, and not included in the S&P/ASX 300 Index, will be eligible to seek shareholder approval at its next AGM to obtain an additional 10% "placement capacity".
  2. With effect from 1 November, 2012, a third alternative will be added to the requirement for "sufficient shareholder spread" in the admission conditions to the ASX, which will enable any company with half of all of its issued ordinary shares held by unrelated parties and at least 300 shareholders, each holding marketable parcels of shares worth $2,000 or more, to be eligible for admission to the Official List (subject to satisfying all other conditions to admission).
  3. Companies applying to be admitted to the ASX after 1 November, 2012, in reliance on the "assets" test (as opposed to the "profits" test) will need to have $3 million – instead of $2 million – in net tangible assets, excluding the costs of its IPO, to be eligible for admission to the Official List.

Additional placement capacity for small and mid cap companies

From August 1, 2012, the ASX Listing Rules will feature a new Listing Rule 7.1A, under which an entity with a market capitalisation of $300 million or less, and not included in the S&P/ASX 300 Index (Eligible Entity) may seek shareholder approval at its AGM to issue equity securities equivalent to up to 10% of the number of ordinary securities on issue, by way of placement, at any time within 12 months from the date of the AGM (Additional Placement Capacity). This additional capacity is in addition to any issues made:

  1. within the 15% cap currently permitted without shareholder approval, or above the 15% cap but which have been approved by shareholders under Listing Rule 7.1; or
  2. under an exception in Listing Rule 7.2.

Entities intending to seek Additional Placement Capacity under Listing Rule 7.1A should note:

  • special resolution – the resolution for Additional Placement Capacity must be approved by ordinary security holders of the entity holding, collectively, at least 75% of the total number of votes able to be cast on that resolution,
  • eligibility assessed at time of AGM – entities are eligible for Additional Placement Capacity only if, at the time of the AGM, its market capitalisation is less than $300 million and it is not a S&P/ASX 300 entity. Two important implications arise from this:
    • entities that are "eligible" to seek Additional Placement Capacity at the time of dispatch of its Notice of AGM, but expect to be included in the S&P/ASX 300 Index or expect their market capitalisation to exceed $300 million by the time of the AGM, will not be entitled to seek Additional Placement Capacity under Listing Rule 7.1A and will be required to disclose this concern in the relevant Notice of AGM; and
    • entities that receive shareholder approval for Additional Placement Capacity at their AGM, but whose market capitalisation exceeds $300 million, or who is included in the S&P/ASX 300 Index, after that AGM is concluded, will nevertheless have the benefit of the Additional Placement Capacity for the immediately following 12 month period.
  • limitation on discount – securities issued under Listing Rule 7.1A must not be issued at a price that is less than 75% of the volume weighted average price (VWAP) of those securities, calculated over the 15 ASX trading days immediately before:
    • if the securities are issued within 5 trading days after the date on which the issue price is agreed, the date on which the issue price of those securities is agreed; or
    • in any other case, the date of issue of those securities.

    The relevant VWAP may be sourced from ASX Customer Service helpline (telephone: 131 279) or any reputable information service provider.

  • additional disclosure – an entity seeking Additional Placement Capacity must disclose, in Notice of AGM, the additional information prescribed under Listing Rule 7.3A. The Notice of AGM should include, amongst other things:
    • the purpose for which securities may be issued in reliance on the Additional Placement Capacity, the entity's allocation policy for such issues and the minimum price at which those securities will be issued;
    • a statement as to the risk of dilution of the respective relevant interests and voting powers of the entity's existing ordinary security holders in the entity, as a result of such an issue, including specifically that there is a risk that:
      • the market price for the securities may be significantly lower on the issue date than on the date of the AGM; and
      • the securities may be issued at a discount to the market price for those securities on the issue date; and
    • a table setting out the comparative, potential dilutionary effect on the entity's existing shareholders of an issue of securities issued in reliance on the Additional Placement Capacity, depending on:
      • what price those securities are issued at; and
      • the aggregate number of ordinary shares on issue in the capital of the entity at the relevant time;

    including where the price of the securities has fallen by at least 50%, and the aggregate number of issued shares in the entity has doubled, since the date of the AGM at which the Additional Placement Capacity was approved.

  • post-approval disclosure – an Eligible Entity who has received shareholder approval for Additional Placement Capacity, must disclose the additional information prescribed in Listing Rule 3.10.5A, each time it issues securities under that approval, including the reasons why the entity issued the securities in reliance on its Additional Placement Capacity, as opposed to a pro-rata or other type of issue.
  • This additional information should be disclosed to ASX at the time of lodgment of the Appendix 3B application for quotation, which has been amended to specifically contemplate issues made pursuant to an entity's Additional Placement Capacity.

ASX Admissions amendments

Security holder spread test

From 1 November, 2012, an entity seeking to be listed on the ASX will only need to meet one of the following three tests in order to satisfy the ASX that it has a sufficient spread of securityholders – and therefore, there is sufficient liquidity in its securities – to become a publicly listed entity:

  • 400 holders, each holding parcels of securities in the main class worth at least $2,000 (excluding restricted securities). There is no minimum percentage of the issued capital that non-related parties are required to hold;
  • 350 holders, each holding parcels of securities in the main class worth at least $2,000 (excluding restricted securities), with at least 25% of all the securities in the main class (excluding restricted securities) being held by non-related parties (see Condition 7 of Listing Rule 1.1); or
  • 300 holders, each holding parcels of securities in the main class worth at least $2,000 (excluding restricted securities), with at least 50% of all the securities in the main class (excluding restricted securities) being held by non-related parties (see Condition 7 of Listing Rule 1.1).

Assets test

An entity seeking to be admitted to the ASX based on the size of its assets – as opposed to its profits – will now be required to have net tangible assets of at least $3 million after deducting the costs of fund raising, before it is eligible to apply for admission.

Listing Rule 1.3.1 has been amended to increase the threshold test from $2 million to $3 million for all applicant entities, other than those that satisfy the profit test in Listing Rule 1.2.

The above amendments to the "spread" and "assets" requirements to admission to the Official List of the ASX will apply to all entities applying for admission to the Official List after 1 November, 2012.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Kristy Dixon
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.