Regulatory Requirements in Listing Retail Debt Securities
In offering corporate bonds for issue, listed entities need to comply with the:
- Fundraising provisions in Ch 6D of the Corporations Act 2001;
- Requirements relating to offers of debentures in Ch 2L of the Corporations Act; and
- ASX Listing Rules
Offers of corporate bonds to retail investors generally require full prospectus disclosure. In May 2010, The Australian Securities and Investment Commission (ASIC) provided conditional relief from many of the more onerous prospectus requirements for issuers of vanilla corporate bonds. The ASIC initiatives simplify the disclosure requirements for certain offers of listed vanilla bonds by allowing such offers to be made with reduced disclosure under a short-form prospectus. The measures will also allow vanilla bonds to be offered under a two-part prospectus, comprising a base prospectus (which may be used for a number of different offers) and a second part prospectus (which will relate to a particular offer).
Listed Entities Compliance Information
To protect the integrity of the market, ASX has standards for the behaviour of listed companies through its Listing Rules. The Issuers business unit makes day-to-day decisions about the application of the ASX Listing Rules. Guidance notes are also published to assist listed companies and their advisers to understand how certain listing rules and procedures operate.
The main ASX Listing Rules threshold requirements for debt issuers are:
- The company must be a public company limited by shares, a government borrowing authority, a public authority, or an entity approved by ASX.
- The company must satisfy either (a) or (b):
- Have net tangible assets of at least $10 million.
- The company’s parent entity has net tangible assets of at least $10 million and will unconditionally and irrevocably guarantee all debt securities to be issued by the company for the period of quotation. The company’s parent entity will also need to provide to ASX copies of its annual accounts for release to the market.
The company must apply and be granted quotation of all the securities that are in the class for which it seeks quotation.
Particular attention is drawn to Listing Rules 1.8 - 1.10, which deal with Debt Listings
- Simple Guide to Listing Debt on ASX (PDF 65KB)
- More information for companies either seeking to list or already listed
- ASX Listing Rules
- ASIC Prospectus relief
- ASIC’s Regulatory Guide 213 (PDF 292KB) provides detailed information on the conditional relief provided
- ASIC Class Order [CO 10/321] (PDF 63KB)