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ASX has today released its new rules for admission to the ASX official list and its response to the consultation on the proposed requirements that began in May 2016.
The new rules address the need to maintain appropriate listing standards and investor confidence in the ASX market, while providing a pathway for companies to list and access capital across their lifecycle. The new rules also keep ASX’s listing framework contemporary and aligned with evolving equity market trends.
The key listing admission rule changes are:
- Increasing the requirement for profit test entities to have consolidated profits for the 12 months prior to admission from $400,000 to $500,000
- Increasing the net tangible assets test from $3 million to $4 million
- Increasing the market capitalisation test from $10 million to $15 million
- Introducing a 20% minimum free float requirement
- Creating a single tier spread test of at least 300 security holders each holding at least $2,000 of securities
- Requiring asset test entities to disclose to the market two full financial years of audited accounts and any significant entity or business that it has acquired in the 12 months prior to applying for admission or that it proposes to acquire in connection with its listing
- Standardising the $1.5 million working capital requirement for those admitted under the assets test.
The new rules begin on Monday 19 December 2016, subject to the normal regulatory clearance process.
Amanda Harkness, ASX Group Executive, said: “ASX undertook an extensive consultation and review of the potential impact of the new rules on the market. This process improved the final package of ASX rules and guidance released today, ensuring a smoother transition to the higher thresholds for companies and continued access to IPOs for retail investors.
“ASX will continue to monitor the impact of the listing standards on the role the ASX market plays in capital formation by companies and risk-taking by investors. The Australian economy is supported by the diversity and integrity of ASX's listing market. The updated standards will strengthen our market’s reputation within the region and around the world.”
ASX has also introduced a policy giving companies announcing a backdoor listing transaction a choice to comply with additional disclosure requirements and have their securities resume trading after the disclosure, or to go into suspension until they have re-complied with the admission requirements.
Kevin Lewis, ASX’s Chief Compliance Officer, said: “This new policy addresses market integrity concerns about ensuring an informed market for investors, while providing a clear set of guidelines for the disclosure needed to enable trading to resume once a backdoor listing is announced.”
Further detail on the package of new listing admission rules and related guidance, and ASX’s response to consultation feedback, follow this media release and is also on the public consultation page of ASX’s website.
