The Australian Stock Exchange ("ASX") has now
finalised the largest changes to its submission requirements for
listed entities in over a decade, which came into effect on the
19th of December 2016. Those changes are aimed at improving the
integrity of the market operated by the ASX and the reputation of
the ASX, which effectively means that the ASX now requires higher
standards from those entities seeking to list on the ASX.
The Listing Rules are not intended to be applied in a
mechanistic or legalistic way; rather they are to be interpreted in
accordance with their "spirit, intention and purpose, by
looking beyond form to substance and in a way the best promotes the
principles on which they are based. The ASX has established both
formal and informal internal committees to assess the substance of
list applicants and it is therefore importance to confer with the
ASX early to ensure that the ASX agree that the mission criteria
are met in substance and the integrity and reputation of the market
he ASX operates is therefore upheld.
The key changes to admission requirements for entities seeking
admission, effective from the 19th of December 2016 are as
The consolidated profit of the entity for the twelve months
prior to admission has been increased from $400,000.00 to
A change to the net tangible assets test of an entity (that is
not an investment entity) from 3,000,000.00 to
An increase in the market capitalisation test on an entity
(that is not an investment entity) from $10,000,000.00 to
A standard $1,500,000.00 working capital requirement; and
A new requirement of:
Audited accounts for the last four financial years and any
significant business or entity it has acquired in the previous
twelve months (or proposes to acquire in connection with the
Where an entity is more than six months and seventy five days
into the current financial year it would need to produce audited or
reviewed accounts for the last half year.
The entity must have a 20% minimum free float at the time of
Single Tier Spread Test
There must be at least 300 non-affiliated security holders each
holding at least $2,000.00 worth of securities and are not
restricted securities or subject to voluntary escrows.
The Listing Rules and Guidance Notes will be updated to
reinforce ASX's absolute discretion on a mission and
"decisions" and that the ASX will take into account the
reputation, integrity and efficiency of its market in exercising
these discretions. In particular, further guidance will now be
given in Guidance Note 1 Applying for Admission – ASX listing
for an applicant that is incorporated in, has its main business
operations or has a majority of its board or a controlling
shareholder resident in an emerging or developing market.
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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The Personal Property Securities Act 2009 is one of the most significant commercial law reforms in recent times.
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