From 14 April 2014, the Australia Securities Exchange (ASX) introduced changes to timetables for rights issues, dividend and distribution reinvestment plans and other corporate actions.
The changes are part of ASX's drive to improve the efficiency and flexibility of its capital raising mechanisms and further reinforce ASX's stated commitment to strengthen the equity capital markets in Australia.
When Will the Changes Take Effect?
The changes will take effect as follows:
- record dates on or before 17 April 2014 will follow the old timetable
- record dates on or after 22 April 2014 (ex-date 16 April) will follow the new timetable.
Accordingly, any corporate action announced before Monday, 14 April 2014, that has an ex-date on or after 16 April 2014 will be subject to the new timetable.
What Are the Changes?
New Rights Issue Timetable
ASX's changes to the rights issue timetable depart slightly from those proposed by ASX in July 2012 as the timetable allows more time between the closing date of acceptances and issue date.
The changes to the rights issue timetable are summarised below:
| Step | Current timetable | Timetable |
| Announcement date to ex-date | 2 business days (day 0 to day 1) |
2 business days (day 0 to day 1) |
| Ex-date to and including record date | 5 business days (day 2 to day 6) |
3 business days (day 2 to day 4 – reduced by 2 days) |
| Trading period for renounced rights (renounceable offer only) | 14 business days (day 2 to day 15) |
8 business days (day 2 to day 9 – reduced by 6 days) |
| Day after record date to and including date that documents are sent to holders | 4 business days (day 7 to day 10) |
3 business days (day 5 to day 7 – reduced by 1 day) |
| Day after documents are sent to holders to and including acceptances close date | 10 business days (day 11 to day 20) |
7 business days (day 8 to day 14 – reduced by 3 days) |
| Day after acceptances close date to and including issue date | 6 business days (day 21 to day 26) |
5 business days (day 15 to day 19 - reduced by 1 day) |
| Total timetable (not including trading period for renounced rights) | Business day 0 to 26 | Business day 0 to 19 |
Shortened Ex-period
ASX is also shortening the ex-period (from five to three business days) for dividends and distributions, interest payments, rights issues (including renounceable, non-renounceable and accelerated), bonus issues, return of capital, buy-packs and reconstructions.
The reduction in the ex-period does not apply to calls, conversions or expiries.
Accelerated Rights Issues
A standard timetable has also been introduced for the following accelerated rights issues:
- accelerated non-renounceable entitlement offers (ANREO)
- accelerated renounceable entitlement offers (AREO) and simultaneous accelerated renounceable
- entitlement offers (SAREO)
- accelerated renounceable entitlement offers with retail rights trading (AREORT).
These changes are summarised in the following table:
| Step | ANREO | AREO and SAREO | AREORT |
| Announcement date to record date | 4 business days (day 0 to day 3) |
4 business days (0 to day 3) |
4 business days (day 0 to day 3) |
| Period for retail trading of renounced rights | 7 business days (day 3 to day 9) |
||
| Day after record date to and including date that documents are sent to holders | 3 business days (day 4 to day 6) |
3 business days (day 4 to day 6) |
4 business days (day 4 to day 7) |
| Day after documents are sent to holders to and including acceptances close date | 7 business days (day 7 to day 13) |
7 business days (day 7 to day 13) |
7 business days (day 8 to day 14) |
| Day after acceptances close date to and including issue date | 5 business days (day 14 to day 18) |
8 business days (day 14 to day 21) |
8 business days (day 15 to day 22) |
| Total timetable (not including trading period for renounced rights) | Business day 0 to 18 | Business day 0 to 21 | Business day 0 to 22 |
Timetables for Dividends and Distributions
ASX is also amending the timetable for dividends and distributions contained in Appendix 6A of the Listing Rules. The amendment will introduce the requirement that the last election date for a dividend reinvestment plan be no earlier than the business day following the record date for the dividend.
Online forms for announcing certain corporate actions
ASX is also looking to implement its new online system after 30 June 2014 (with listed companies having automatic access to the system). Under the new system, online forms will enable companies to advise the market of dividends or distributions, interest payments, cash capital returns, security spills and consolidations.
Once the online form is submitted, the facility will automatically produce an announcement. Companies will have the opportunity to preview the announcement before releasing it to the market. After the system's implementation date, which at this stage has not yet been confirmed, there will be an initial grace period of six months after which the use of the forms will become mandatory.
Here to Assist
If you have any queries about the above changes, please contact us, we would be happy to assist.
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.
