Australia: Changes To ASX Listing Admission Requirements–Effective 19 December 2016

Australian Securities Exchange (ASX) has introduced a number of changes to the listing admission requirements in the ASX Listing Rules which impose higher standards on entities seeking admission to the official list of ASX.

Key changes

The key changes to the admission requirements are:

  • For entities seeking admission under the profit test, increase of minimum consolidated profit threshold from AU$400,000 to AU$500,000. 
  • For entities seeking admission under the asset test:

    • increase of minimum net tangible asset (NTA) threshold from AU$3 million to AU$4 million;
    • increase of minimum market capitalisation threshold from AU$10 million to AU$15 million;
    • new standardised requirement to hold working capital of AU$1.5 million; and 
    • new requirement to provide audited accounts for up to 2.5 financial years for the entity seeking admission and any significant business or entity acquired in the previous 12 months or to be acquired in connection with the listing.
  • For all entities:

    • new requirement to have a 20% minimum free float at the time of admission; and 
    • new single tier spread test which requires at least 300 'non-affiliated security holders' each holding at least AU$2,000 worth of securities that are not restricted securities or subject to voluntary escrow arrangements. 
  • For entities seeking a foreign exempt listing: 

    • new requirement to be listed on an overseas exchange or market acceptable to ASX; and
    • new minimum market capitalisation threshold of at least AU$2 billion which may be met as an alternative to meeting a net tangible asset threshold of at least AU$2 billion.

The changes are intended to improve the quality, integrity and sustainability of ASX's listing participants and increase ASX's international competitiveness in light of increased cross-border listings. While the former may be true, the changes make it more difficult for early stage entities, such as resource exploration, technology and innovation entities (ESEs), to meet the admission requirements. This may result in these entities seeking to list offshore or on an alternative Australian based platform.

Further details of the key changes and the impact of these changes on prospective listing applicants are set out below.

Financial thresholds

Entities seeking admission to the official list of ASX must meet either the profit test or the asset test. The key change to the financial thresholds under each of these tests is described below.

  Former requirements New requirements 
Profit test Consolidated profit from continuing operations of at least AU$400,000 for the 12 months prior to admission. Consolidated profit from continuing operations of at least AU$500,000 for the 12 months prior to admission.
Asset test
  • NTA of AU$3 million; and 
  • Minimum market capitalisation of AU$10 million.
  • NTA of AU$4 million; and 
  • Minimum market capitalisation of AU$15 million.

Generally speaking, well established entities with a strong track record of profitability apply for admission under the profit test. Accordingly, the increase to the consolidated profit threshold from AU$400,000 to AU$500,000 is unlikely to have a major impact on the listing prospects of these applicants. In any event, although the increase appears substantial (25 per cent), this threshold has not changed since 1994 and so the increase is relatively moderate when considered over time.

On the contrary, ESEs typically seek admission under the asset test because they do not have a history of profit making operations but have assets of significant value such as plant and equipment or intellectual property. The increase to the market capitalisation threshold from AU$10 million to AU$15 million and to the NTA threshold from AU$3 million to AU$4 million is significant in percentage terms (50 and 33 per cent respectively) and, accordingly, is likely to have a material impact on the ability of some ESEs to gain admission to the official list.

Audited accounts

ASX has introduced a new requirement for entities seeking to list under the assets test which requires the entity to provide at least two full financial years of audited accounts (including the accounts of any significant entity acquired in the previous 12 months or proposed to be acquired in connection with the listing). Additionally, where an entity is more than six months and 75 days into the financial year it will need to produce audited or reviewed accounts for the last half year.

Although this will provide investors with greater assurance about an entity's assets, liabilities and financial performance, it is likely to create significant compliance headaches for entities that do not have sufficient operating history or cash resources to comply, such as ESEs.

Working capital

The working capital requirement for entities seeking to list under the assets test will be standardised so that all entities have working capital of at least AU$1.5 million at the time of admission, taking into account budgeted revenue and budgeted costs for the first financial year. This change is aimed at providing greater certainty to investors that a newly listed entity has sufficient financial resources to carry on its business.

Previously, only exploration entities were required to take into account budgeted costs for the first financial year.

20% minimum free float requirement

All entities seeking admission (whether under the profits test or assets test) must have a 'free float' at the time of admission of not less than 20%. The term 'free float' means the percentage of an entity's main class of securities that are not classified by ASX as restricted securities or subject to voluntary escrow arrangements and that are held by non-affiliated security holders.

Non-affiliated security holders of an entity are security holders who are not:

  • a related party of the entity; 
  • an associate of a related party of an entity; or 
  • a person whose relationship to the entity, or to a person that is a related party of the entity, or to an associate of a related party of an entity is such that ASX considers the person should be treated as affiliated with the entity.

Despite being formally adopted on 19 December 2016, ASX has imposed a 20% free float since May this year under its residual discretion to grant or refuse admission on any conditions it thinks fit (described in further detail below).

Spread test

ASX has changed the existing spread test by introducing a single tier test requiring an entity to have at least 300 non-affiliated security holders who each hold securities worth AU$2,000 or more.
Previously, the spread test was a three tiered test where the minimum number of non-affiliated securities was determined depending on the free float of the entity.

Foreign exempt listings

A special regime is applicable to entities with a main listing on an overseas stock exchange that maintain a secondary listing on the ASX market as a foreign exempt listing.

With effect from 19 December 2016, the following changes to the foreign exempt listing regime apply:

  • A foreign entity must have its primary listing on an overseas stock exchange or market that is acceptable to ASX.

    The exchanges ASX considers acceptable are Borsa Italiana, Deutsche Börse, EuroNext (Amsterdam), EuroNext (Brussels), EuroNext (Lisbon), EuroNext (Paris), Frankfurt Stock Exchange, HKSE, LSE, SGX, SIX Swiss Exchange, TSE (Tokyo), TSX (Toronto), NASDAQ, NYSE, NYX, JSE and Bursa Malaysia.

    Notably, this list does not include major international exchanges such as the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE), Korea Exchange (KRX), the National Stock Exchange of India (NSE) or the Japan Exchange Group (JPX).
  • A foreign entity may have a minimum market capitalisation of at least AU$2 billion as an alternative to having an NTA of at least AU$2 billion.

Residual discretion to refuse admission

Despite the new changes, ASX retains a residual discretion to grant or refuse admission without giving any reasons or impose any conditions it considers appropriate. ASX has introduced new guidance on when it will exercise its discretion to refuse a listing, which includes:

  • when an entity has an unacceptable structure or operations;
  • where ASX has had prior unacceptable dealings with the applicant, its proposed directors, or professional advisers; or
  • where ASX otherwise has concerns that admitting the applicant to the offical list may put at risk the reputation of the ASX market as one of quality and integrity. 


The higher standards now demanded from prospective listing applicants should meet ASX's objective of improving the quality, integrity and financial stability of its listing participants and promote market confidence. However, the downside is that the changes are likely to preclude some prospective applicants who are unable to meet these higher thresholds from listing on ASX, particularly ESEs.

In a time when creating a regulatory environment in Australia that supports investment in technology, innovation and growth is so important, we hope that these changes do not have the opposite effect and result in strong and viable ESEs that are unable to meet the new threshold requirements seeking to list on, or raise capital from, markets offshore.

Next steps

Before making any decision to list on the ASX or to raise capital, early engagement with ASX and professional advisers is highly recommended.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

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.

Similar Articles
Relevancy Powered by MondaqAI
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”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions