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Companies Update 17/04

Guidance Note 16
(PDF 40KB)

Settlement Rule Guidance Note 12
(PDF 94KB)

 

Companies Update
9 March 2006
Update no 01/06

Important information for ASX Listed Entities

Trading Halts - Update on trial of extended halts

In December 2004, ASX announced that it would conduct a trial for extended trading halts in specified circumstances, to assess the impact on investors and participants in the market. The period of the trial has been extended to enable ASX to fully consider both the impact of such extended trading halts, and the views of market participants. ASX hopes to complete its review and advise its policy position within the next 2 to 3 months.

Until its conclusion, the trial will continue on the basis originally outlined. (Refer Companies Update 17/04 released on 15 December 2004)

Trading Halts - Considerations in granting halts

Guidance Note 16 - Trading Halts (PDF 40KB) outlines ASX policy on the operation of trading halts and says as follows:

'The temporary nature of a trading halt reflects the general principle that interruptions to trading should be kept to a minimum, while affording companies the opportunity to manage specific disclosure issues as and when they arise.'

ASX must often balance the tension between the need to keep interruptions in trading to a minimum, and the interests of an informed market. Reflecting the policy that a market should be available to a listed company's security holders except in circumstances where:

  • there is materially price sensitive information that the company is not in a position to release;
  • there is a false market in the company's securities; or
  • there is a significant risk that the market in the company's securities would become disorderly

ASX would generally consider inappropriate a request for a trading halt for reasons that are not connected with keeping that market fully informed and trading in an orderly fashion.

As an example, trading halts have been granted where a significant stake of a listed company has been sold by existing shareholders, and then on-sold via a book-build process. Where the stake is significant, ASX will take into account the materiality of the information regarding the sale (price or quantity of securities to be sold) which may require disclosure, and orderly market considerations. What ASX may consider to be a significant stake will vary depending on all of the relevant circumstances.

ASX would not be likely to grant a trading halt in connection with a sell-down of a stake of a company, or in any other circumstances where the trading halt is requested solely for the benefit of particular third parties (such as the selling down shareholders and their transferees) or to facilitate a particular transaction, rather than in the interests of market as a whole, and where the disclosure and orderly market concerns can be addressed by an immediate information release by the company concerned. As indicated in Guidance Note 16 (PDF 40KB), ASX would also be unlikely to agree to a trading halt imposed for a company's administrative or marketing convenience.

Listed companies and their advisers should note that in deciding whether or not to grant a halt, ASX will take into account all of the circumstances of each particular case.

For advice in specific cases, please contact your ASX Adviser, Issuers.

Access to CHESS holdings by issuers

In February 2006, ASTC released Settlement Rule Guidance Note no 12: Access to CHESS holdings by Issuers (PDF 94KB).

The purpose of this Guidance Note is to provide guidance to Issuers and Market Participants about the application of ASTC Settlement Rule 5.14.  It details the methods of access to CHESS holdings by Issuers and provides that going forward, Controlling Participants are to authorise Holding Adjustments by Issuers.

To help keep our Listed Entities informed of information and events ASX will be sending emails to the Company Secretary's Office from time to time. You are receiving this email because you have been identified as a key contact within the Company Secretary's Office at your organisation. If you would like to update your email address please do so via the Directors/Senior Management page on ASX Online for Companies. Feel free to forward this email to any relevant parties within your organisation.