From 1 January 2012, companies seeking a new listing
will be required to satisfy the ASX that its directors or proposed
directors are of "good fame and character"
Amendments to the Listing Rules will require applicants
to provide ASX with relevant criminal history and bankruptcy
Companies with foreign directors need to ensure that
the relevant checks are undertaken in places that the director has
previously conducted business well in advance of the listing to
prevent any delays in the company's listing
In late September 2011, ASX announced its intention to amend the
Listing Rules to require a company seeking an ASX listing to show
that its directors and proposed directors are of good fame and
character. These changes will take effect from 1 January 2012.
Under the proposed changes, applicants will be required to
provide ASX with a police/CrimTrac criminal history check and
Insolvency and Trustee Service Australia (ITSA)
bankruptcy check for each director or proposed director, and a
statutory declaration from each director or proposed director
affirming, among other things, that they have not been the subject
of relevant disciplinary or enforcement action by an exchange or
securities market regulator. In the case of a trust, this will
apply to directors and proposed directors of the responsible
entity. ASX will have primary regard to these documents when
determining whether a director is of good fame and character and
may request additional information if required.
These checks are in addition to the Australian Securities and
Investments Commission's recently released Regulatory Guide
228 Prospectuses: Effective disclosure for retail
investors. This requires that a prospectus contain details of,
among other things, the directors' criminal convictions, any
declarations of contravention made against a director under the
Corporations Act 2001 (Cth), and any disciplinary action within
Australia or other jurisdictions.
In addition to companies seeking new listings on or after 1
January 2012, companies seeking re-admission to the official list
after a demerger or other transaction involving a change in the
nature or scale of the company's activities (and are required
to re-comply with the Listing Rules in relation to admission and
quotation) will also be required to comply with the new
The practical impact of these changes on existing companies,
particularly in relation to the appointment of new directors, is
discussed further in our article entitled "Implications for
foreign directors complying with the proposed 'good fame and
character' requirement" which will be published shortly.
The procedure, costs and timing of obtaining the relevant checks
are also discussed in that article.
Importantly, companies with foreign directors will be required
to obtain the overseas equivalent of both the criminal history
check and ITSA bankruptcy check. As it can take some time to obtain
the relevant checks, companies must ensure that they obtain the
checks well in advance to ensure that there are no delays in their
Further guidance from ASX is expected to be released shortly in
a revised Guidance Note 1 Applying for Admission and Quotation and
Guidance Note 4 Foreign Entities.
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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