The latest ASX companies update released on 22 January 2009 has
provided a reminder to listed entities of their obligations under
ASX Listing Rule 3.1 that:
Once an entity is or becomes aware of any information
concerning it that a reasonable person would expect to have a
material effect on the price or value of the entity's
securities, the entity must tell ASX that information.
More specifically, the recently released ASX company update has
reminded listed entities that the entity is required to keep the
market informed of expected material differences in the
entity's financial performance.
In the current financial downturn, profits are expected to fall
for a large number of companies. It is therefore critical that
companies understand their continuous disclosure obligations to
generate market releases about expected financial results.
When should an entity disclose material differences in its
Entities are required to make an immediate appropriate
announcement when they become aware of an expected material
difference in the financial results for that period from the
results that were recorded in the previous period, or from
forecasts for that period that have been provided to the market by
the entity and (in appropriate cases) from analysts' consensus
Can the entity delay disclosing the information until the next
It is not acceptable for the release of such information to be
delayed until the release of the periodic financial report or
statutory financial report, or until the release of the information
has been considered by the board.
When will the ASX review the entity's previous
announcements to determine whether the entity has complied with
Listing Rule 3.1?
Where an entity reports results that have varied by greater than
10% to 15% from, for example, results of a previous corresponding
period, the ASX will undertake a review of previous announcements
made by the company during and after the financial reporting period
to determine if continuous disclosure obligations have been
What steps will the ASX take if the entity does not disclose a
After the ASX has reviewed the entity's announcements and it
does not appear that an announcement indicating the likelihood of a
material variation in the results had been released prior to the
release of the periodic financial report, the ASX may initiate a
formal examination process (commencing with asking the listed
entity to show how it complied with its obligations) followed by
Copies of correspondence between ASX and the entity may be
released to the market.
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