The release of the proposed changes follows an extensive consideration of current market practices and an examination of procedures in place in offshore, increasingly accessible markets and a review of the extent to which the market has changed over the 13 years since these procedures were last overhauled.
It is proposed to offer companies a wider and better choice between inclusive capital raising programs such as pro rata issues and share purchase plans, and less inclusive forms of capital raising such as placements. This will allow the development of capital raising strategies tailored to the individual requirements of the particular listed entity and the needs of that entity's investors.
Among the amendments, ASX proposes increasing the percentage of issued capital that may be issued without investor approval from 15 percent to 20 percent per annum. In addition, it is proposed to reduce from 40 to 23 business days the timetable for both renounceable and nonrenounceable pro rata issues, thereby removing one of the principal impediments to raising capital in this way. And it is also proposed that investors be allowed to confer a general mandate on an entity to issue securities for a period of up to 13 months (enabling it to be reconsidered at subsequent annual general meetings.
The Exposure Draft is available at www.asx.com.au/about/pdf/CapitalRaising.pdf and ASX is seeking comments from all interested parties by 30 November in order to assess the impact of the amendments on the extent of activity on our capital markets.
