Listing Rule Amendments (PDF 55KB)
Guidance Note 27 (PDF 38KB)
Chapter 4 -
Listing Rules (PDF 108KB)
Companies Update 07/10
09 December 2010
Update no 11/10
Important information for ASX Listed Entities
Listing Rules on Trading Policies come into effect on 1 January 2011
New listing rules (PDF 55KB) about the policies governing trading in a
listed entity's securities by its directors and other key management personnel
("Trading Policies") come into effect on 1 January 2011. At the same
time, consequential amendments to the Appendix 3Y Change of Director's
Interests Notice come into effect. The amended version of the Appendix 3Y is to
be used from 1 January 2011.
The requirements are set out in listing rules 12.9
Guidance Note 27 Trading Policies (PDF 38KB) contains guidance to assist
listed entities understand and comply with their obligations under these listing
The purpose of this Companies Update is to respond to some queries ASX has
received to date in relation to Trading Policies.
Categories of listed entity affected
The requirement to have a compliant Trading Policy applies to all entities
admitted to the Official List in the ASX Listing category. It does not apply to
entities admitted to the Official List in the Debt Listing or Foreign Exempt
Listing categories. 1
Timing and lodgement requirements
To meet the 1 January 2011 commencement date for these measures, all listed
entities in the ASX Listing category will need to have adopted a Trading Policy
that complies with listing rules 12.9 to 12.12 and give a copy of it to the Company
Announcements Platform by 31 December 2010.
Entities that already have a Trading Policy in place that complies with
listing rules 12.9
to 12.12 still need to give a copy of it to the Company
Announcements Platform by 31 December 2010.
ASX will begin following up listed entities that have not lodged their Trading
Policies with the Company Announcements Platform in the first few weeks of 2011.
New listing applicants
Listing rule 1.1
includes a new condition 15 that will require new applicants for
listing in the ASX Listing category on or after 1 January 2011 to adopt and
disclose a compliant Trading Policy as a condition of admission to the Official
List. This applies even where the application for admission was lodged prior to
1 January 2011.
Persons to be bound by a Trading Policy
At a minimum, a listed entity's Trading Policy must apply to its "key management
personnel", as defined in AASB 124 Related Party Disclosures. An entity,
however, may choose to extend its Trading Policy to a wider group of executives
or employees, if it wishes.
For those entities that do extend their Trading Policy to a wider group of
executives or employees, ASX will accept in satisfaction of the lodgement
listing rule 12.9, either a copy of the full Trading Policy or a
verbatim extract of the relevant provisions in the Trading Policy that apply to
key management personnel.
Main requirements of the new rules
Listing rule 12.9:
- An entity must adopt a policy on trading in the entity's securities by
key management personnel and give a copy to the Company's Announcement
Platform for release to the market.
- The Trading Policy must comply with the minimum content requirements of
listing rule 12.12.
Listing rule 12.10:
- If a material change is made to an entity's Trading Policy, the entity
must release the amended Trading Policy on the Company Announcements
Platform within 5 business days of the material change taking effect.
Guidance Note 27 has further information on the types of amendments to a
Trading Policy that may constitute a material change requiring release of
the amended policy to the market under this rule.
Listing rule 12.11:
- The entity must give a copy of the Trading Policy to ASX immediately
Listing rule 12.12:
The minimum content requirements for a Trading Policy are set out in
listing rule 12.12. There are five matters that must be covered.
- Listing rule 12.12.1 Closed periods
The Trading Policy must specify the entity's closed periods. A "closed
period" is a fixed period specified in the Trading Policy when an entity's
key management personnel are generally prohibited2
from trading in the entity's securities.
This means that a Trading Policy must specify at least some fixed period
of time during which trading in securities by key management personnel is
generally prohibited. A Trading Policy that does not specify any such fixed
period, or that specifies that there is no such fixed period, is not
compliant with listing rule 12.12.
A Trading Policy may comply with the requirement to specify closed
periods either by:
- generally prohibiting trading by key management personnel at all
times, except during certain defined "trading windows" (in which case,
the closed period is the whole of the year apart from the defined
trading windows); or
- defining fixed periods, generally referred to as "black-out
periods", throughout the year where trading by key management personnel
is generally prohibited (in which case, the closed periods are the
defined black-out periods).
The listing rules do not mandate what periods an entity must choose as
its closed periods. It is the responsibility of each entity to define in its
Trading Policy closed periods that are appropriate to its circumstances. In
doing so, the entity should be mindful of the perception that trading by its
key management personnel during certain periods may create. One such example
is if it takes place during a period where those personnel may have, or be
perceived to have, access to information that has not yet been made
available to the market (for instance, in the lead up to lodgement of
periodic financial reports).
For this reason, entities which report on a semi-annual basis should
consider whether it is appropriate to include within their closed periods
the period from the close of books at half and full year end until the
release of their financial results for the half and full year respectively.
They can address this in their Trading Policy:
- if they prescribe trading windows, by including within their
permitted trading windows a short period (say, two to six weeks)
commencing from the trading day after the release of their financial
results for the half and full year;3 or
- if they prescribe black-out periods, including within their
nominated black-out periods the period from the close of books at half
and full year end until the release of their financial results for the
half and full year respectively.4
Some entities (for example, mining exploration entities that are not yet
producing revenue and that release quarterly cash flow reports under
4.7B (PDF 108KB) may decide that their quarterly cash flow reports are a
more appropriate reference point for their closed periods than their half
and full year financial results. Those entities should consider whether it
is appropriate to include within their closed periods the periods from
quarter end until the release of their quarterly cash flow reports.
Ultimately, however, it remains the responsibility of each entity to
decide what the appropriate closed periods are under its Trading Policy.
- Listing rule 12.12.2:
The Trading Policy must include the restrictions on trading that apply to
the key management personnel.
- Listing rule 12.12.3 Excluded trading:
The Trading Policy must include information on any trading that is not
subject to the Trading Policy. Guidance Note 27 provides further guidance on
the types of trading that an entity may choose to exclude from the operation
of its Trading Policy. These are generally various kinds of 'passive' or
- Listing rule 12.12.4 Trading during a prohibited period with
prior written clearance:
Listing rule 12.12.4 requires the Trading Policy to include information
on any exceptional circumstances in which key management personnel may be
permitted to trade during a prohibited period with prior written clearance.
"Prohibited period" is defined in listing rule 19.12 as any closed period (that is, one of the fixed
periods that are required to be specified in the Trading Policy), and any
additional period arising from time to time when an entity imposes a
prohibition on trading by key management personnel (that is, an ad hoc
prohibition on trading).
Guidance Note 27 contains further guidance on what may be taken to be
- Listing rule 12.12.5 Procedures for clearance:
Listing rule 12.12.5 requires the Trading Policy to set out the
procedures for obtaining prior written clearance to trade during a
prohibited period under listing rule 12.12.4.
Guidance Note 27 - Trading Policies
In addition to the matters referred to above, the Guidance Note provides
listed entities with guidance on the inclusion of restrictions on trading in
derivative products by key management personnel during prohibited periods under
the Trading Policy.
Since the release of the original text of Guidance Note 27 on the ASX website
on 19 July 2010, a minor amendment has been made to one paragraph in the
Guidance Note to clarify that non-discretionary trading plans may encompass
plans in which a number of individuals participate as well as plans that have
only one director or executive as a participant.
Appendix 3Y Change of Director's Interest Notice
Appendix 3Y form of notification of a change in a director's interests has
been amended to provide space to include the following information.
- Were the interests the subject of the notification traded during a
closed period where prior written clearance under the Trading Policy was
required? (NB: This requires notification of whether the relevant trading
occurred during a closed period, i.e., one of the fixed periods of
prohibition under the Trading Policy, not to trading during an ad hoc
- Was prior written clearance obtained?
- If the prior written clearance was obtained, the date on which it was
The amended version of the
Appendix 3Y is to be used from 1 January 2011.
Please refer to
Companies Update 07/10 for a link to the Consultation Paper
and Exposure Draft for these rules.
Please contact your Listings Adviser if you have any queries.
1 ASX may in respect of any
particular Debt Listing under listing rule 1.10.2, or any Foreign Exempt Listing
under listing rule 1.15.2, specify additional listing rules that that entity
must comply with.
2 Under listing rule
12.12.3, certain types of trading by key management personnel may be excluded
from the operation of the Trading Policy. Also, under listing rule 12.12.4,
trading by key management personnel may be permitted during a closed period but
only if there are exceptional circumstances and with prior written clearance.
3 Entities in this category may also wish to
consider whether it is appropriate to allow a trading window for a short period
commencing on the trading day after their annual general meeting and also during
the currency of a long form prospectus or PDS offering securities that are to be
quoted on ASX.
4 Entities in this category
may also wish to consider whether it is appropriate for their black-out periods:
- to commence a few weeks before close of books to align
with when key management personnel may receive unaudited information about
the probable financial position at balance date; and
- to last at least until the beginning of the next trading
day after the release of their results, to allow time for the market to
absorb those results.