The message from the ASX is clear. Listed entities should
consider seeking trading halts more often, to stop uninformed
trading and facilitate compliance with continuous disclosure
Yet the response from listed entities has been lukewarm at best.
Heavyweights such as BHP Billiton, Telstra and the Australian
Banker's Association have expressed concern that, given the
negative connotations generally associated with trading halts,
"a push by the stock exchange for greater use of trading
halts ahead of big announcements could unintentionally wipe
billions of dollars off the market".1
However, there is evidence that the use of trading halts is
becoming more frequent and more common, particularly amongst
smaller companies. But, as Patrick Durkin, journalist at the
Australian Financial Review and deputy editor of the Financial
Review's BOSS Magazine, notes:
"...it is important to focus on how appropriate trading
halts are being used, not just how
This paper focuses on how directors, company secretaries,
in-house counsel and other company officers can use trading halts
to better satisfy their entity's continuous disclosure
This issue will typically arise where information concerning an
entity – Entity X – is required to be disclosed to ASX
under Listing Rule 3.1 but an announcement cannot be released to
the market immediately.3
In those circumstances, the following questions need to be
Should a trading halt be sought?
How can a trading halt be used effectively?
What are the benefits of seeking a trading halt?
What are the limitations to a trading halt?
How can a trading halt be sought?
When does a trading halt end?
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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In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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