Important information for ASX Listed Companies

Trading Halts - Proposed Trial of Extended Halts

Recently, listed companies have increasingly used a book build process for significant issues of additional securities. In the context of such offerings, listed companies have also requested trading halts, mainly to maintain an orderly market during the price discovery process.

In some cases, a trading halt has been followed by a day (or more) of suspension, when the issue has not been able to be completed within the prescribed 2 day period for a trading halt.

Paragraph 15 of Guidance Note 16 - Trading Halts says as follows.

15. In certain exceptional circumstances ASX may consider a request by a company to grant a 'back to back' trading halt. This would have the effect of extending the trading halt period to more than two days but no more than four days. However, in recognition of the general principle that interruptions to trading should be minimised as far as possible, ASX would only grant such a request if it considered that it was necessary in the interests of an orderly, fair and informed market. What constitutes 'exceptional' circumstances will depend on the facts of each case, and companies should seek guidance from their home branch. 

Following a review of ASX policy underlying these types of actions and its interaction with market developments, ASX considers that it may be appropriate to permit 'back to back' trading halts for issues of securities in the following circumstances:

• It is significant in the context of the company's issued capital.
• It is essentially pro-rata to all holders (eg an accelerated offering conducted in two stages such as a 'jumbo' offer, but not limited to such offers).
• It involves the use of the book build process.

The market release notifying the halt will indicate the length of the particular halt (i.e. '2+1' where only one additional day is required, or '2+2' for the full period).

ASX proposes to conduct a trial for extended trading halts applied in these circumstances over the next 6 months, in order to assess the impact on investors and participants in the market. It is important that any companies planning significant issues or offerings contact their Companies Adviser at the earliest opportunity to ascertain whether the circumstances of the offering are within the ambit of ASX policy as outlined above.

For more information, please consult your Companies Adviser.