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| Companies Update 16 March 2004 |
Update no 04/04 |
Important information for ASX Listed Entities
ASX Listing Rule Amendments – Capital Raising Mechanisms
The purpose of this Update is to advise listed entities about the progress of ASX’s proposed Listing Rule amendments dealing with capital raising mechanisms, which were exposed for public comment in October 2003 and proposed to take effect on 31 March.
Proposed increase of 15% limit under Listing Rule 7.1
The submissions received in response to ASX’s proposed Listing Rule amendments expressed wide support for the proposal to increase the limit for issues of securities that may be made without shareholder approval under listing rule 7.1 (the Limit) from 15% to 20%.
However, some respondents expressed concern that certain investors may be disadvantaged by the proposed increase, in the absence of provisions limiting the price discount of securities issued under the Limit.
Taking into account concerns expressed by these stakeholders and after liaising with ASIC, ASX has decided to further consider possible alternatives in relation to increasing the Limit. ASX may therefore issue a further discussion document seeking the views of stakeholders in relation to the proposal and any alternatives, with a view to introducing rule amendments in this regard at the earliest opportunity.
As a result, any changes to the limit on placing capacity in listing rule 7.1 will not take effect on 31 March.
Proposed amendments to take effect as from 31 March
ASX intends to proceed with the following amendments, which will come into effect on 31 March 2004.
- A new exception from listing rule 7.1 for securities to be issued under a security purchase plan (SPP) that does not require a prospectus or Product Disclosure Statement, pursuant to ASIC relief. The exception will not extend to issues to an underwriter of an SPP, and will be limited to issues of not more than 30% of ordinary issued capital, at a price that is not less than 80% of the average market price.
- Reductions to the timetables for both renounceable and non-renounceable pro rata issues of 42%, from a total of 40 business days to a standard total of 23 business days.
- A new exception from the rule for securities issued with investor approval under the takeover provisions of the Corporations Act.
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Certain technical amendments, including those relating to convertible securities.
Other proposed amendments deferred for further consideration - Proposed provisions to give investors the ability to confer a general mandate on an entity to issue securities with an unlimited discretion for a period of up to 13 months. ASX will undertake further analysis in this regard.
- The proposal to include an issue to the underwriter of a dividend or distribution reinvestment plan in listing rule 7.2 exception 7.
ASX will advise listed companies about the revised proposal by way of further update, as soon as possible.
ASX has also determined not to proceed with rule amendments to listing rule 7.7 to remove the special New Zealand directive.
Technical Listing Rule amendments – Financial Services Reform Act - ASX Market Rules, ASTC Settlement Rules & ACH Clearing Rules
Technical listing rule amendments consequential to the introduction of the ASX Market Rules, ASTC Settlement Rules and ACH Clearing Rules (the Rules) took effect from 11 March 2003. The amendments reflect changes in cross-references, nomenclature and definitions, as those changes are introduced in the Rules. The Listing Rules available on the ASX website and ASX Online have been updated to include these changes, and they will be incorporated in hard copies of the Listing Rules containing the amendments in relation to capital raising mechanisms, effective 31 March 2004. Listed entities and subscribers to the Listing Rules will receive these updates shortly.
For further information please contact your Companies Advisor.