Effective from 31 January 2023, ASX is changing its approach to the lodgement of announcements. Companies should be aware of this new rule change as companies failing to adhere to the new rules shall be suspended from trading for failing to lodge periodic reports on time.
Current ASX Compliance Rules
Presently, if an entity fails to lodge a periodic report before the market announcements office closes on the business day when the report is due, ASX does not suspend trading in the entity’s securities if it lodges the report within a reasonable time before market opens on the next trading day.
Updated ASX Compliance Rules
Any periodic reports with a due date on or after 31 January 2023 must be lodged before the market announcements office closes* on the business day when the report is due, or the entity’s securities will be suspended from trading on the next trading day under Listing Rule 17.5.
If the report is lodged between the closure of the market announcements office and the imposition of the suspension, the entity’s securities will normally be reinstated to quotation on the next trading day after the suspension is imposed.
*Normal business hours for the ASX market announcements are 8:30am to 7:30pm (8:30pm during daylight saving) Sydney time, Monday to Friday on ASX Trading Days.
Entities that are required to lodge an Appendix 4C or Appendix 5B should also keep in mind the related party disclosures and Funding Disclosures.
Related Party Disclosures (Item 6)
In regard to Item 6 of Appendix 4C and Appendix 5B, it is requirement for a disclosure by a listed entity of payments made to its related parties and their associates. The entity must disclose any cash payments made to related parties (i.e., director fees).
Additionally, Listing rules 4.7C.3 and 5.3.5 require a description of, and explanation for, any related party transactions.
Funding Disclosures (Item 8)
In terms of Appendix 4C and Appendix 5B, it is a requirement that an entity with less than two quarters of funding available, is to address the three additional questions set out under Item 8.
The additional questions go toward the entity’s ability to meet its ongoing requirements under Listings Rule 12.1 (sufficient operations) and Listing Rule 12.2 (adequate financial condition).
It is to be noted that ASX advises entities that rounding is not permitted in the calculation of the remaining number of quarters of funding available. An entity cannot round its available funding up to meet the test of two quarters of available funding. There is no exception to this.
The availability of additional funding after the end of the quarter does not relieve any entity from the requirement to properly address the additional questions in Item 8. An entity must answer the additional questions in sufficient detail so that the market is fully informed of any measures it is taking to guarantee the continuance of its operations and ongoing financial viability.
Article originally published by Hall Chadwick WA. For any help in understanding the implications above, please contact your Hall Chadwick QLD advisor.