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Guidance Note 16 - Trading Halts (PDF 40 KB)

Companies Update 08/06


Companies Update
3 October 2008
Update no 09/08

Important information for ASX Listed Entities

1. Company Announcement Hours over the weeks when Daylight Saving commences
ASX advises that the hours of the Company Announcements Office ("CAO") will be as follows over the next few weeks as Daylight Saving for the 2008 - 2009 period comes into effect in all the States and Territories, except Queensland and the Northern Territory.

CAO will stay open for one hour longer than usual during the period Monday 6 October 2008 to Friday 24 October 2008 inclusive, as Daylight Saving does not commence in Western Australia until Sunday 26 October 2008.

From Monday 27 October 2008, when Western Australia will have gone onto Daylight Saving, CAO's closing time will revert to 7.30 pm Sydney time (AEDT).

This means that WA companies will continue to be able to lodge announcements until 5.30 pm WST throughout.

All the times given in the table below are Sydney time.

CAO opens CAO closes
Prior to 6 October 2008 [no State or Territory in Daylight Saving] 8.30am 7.30pm
6 October 2008 to 24 October 2008 inclusive [Daylight saving commences in NSW, Victoria, Tasmania, South Australia and the ACT on 5 October; but does not commence in WA] 8.30am 8.30pm
From 27 October 2008 [Daylight saving commences in WA on Sunday 26 October] 8.30am 7.30pm

2. Disclosure of material margin loan positions by company directors
ASX wishes to reiterate the guidance it released in Companies Update 02/08 on the subject of disclosure of margin loan positions entered into by company directors.

Where a director has entered into margin loan or similar funding arrangements for a material number of securities, ASX reiterates that listing rule 3.1 (PDF 204 KB), in appropriate circumstances, may operate to require the entity to disclose the key terms of the arrangements, including the number of securities involved, the trigger points, the right of the lender to sell unilaterally and any other material details.

Whether a margin loan arrangement is material under listing rule 3.1 (PDF 204KB) is a matter which the company must decide having regard to the nature of its operations and the particular circumstances of the company.

The company is in the best position to ascertain the details of any margin loan arrangements and the particular circumstances of each of its directors and hence is best able to assess the materiality of any margin loan arrangements. In making this assessment, factors to consider should include:

  • The percentage of the issued shares held by the director which are subject to a margin loan;
  • Whether the margin loan arrangement relates to a single stock holding held by the director;
  • The capacity and intention of the director to meet any margin calls;
  • The liquidity of the company's stock.

3. Trading Halts in connection with significant capital raisings

ASX wishes to update the guidance it gave in Companies Update 01/06 concerning the availability of Trading Halts in connection with significant capital raisings.

Guidance Note 16 - Trading Halts (PDF 40 KB) 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.

In the context of significant capital raisings, trading halts have been granted to allow the conduct of a bookbuild for the institutional component of an accelerated entitlements issue or accelerated renounceable entitlements issue, and it is common for back to back trading halts to be granted to allow for a total of 4 days for the carrying out of the institutional component of such entitlements issues.

It is less common for trading halts to be sought or granted to companies when they are making significant placements of securities, whether or not there is a bookbuild or other marketing exercise to be undertaken before the placement is finalised. Where the size of the placement is significant, ASX will take into account the materiality of the information regarding the placement (price or quantity of securities to be issued) 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 consider it appropriate for a trading halt to be granted if all the material information concerning the placement can be released immediately.

As indicated in Guidance Note 16 - Trading Halts (PDF 40 KB), 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.

Companies are strongly encouraged to discuss with their Issuers Adviser at an early stage the possibility of their requesting a trading halt in connection with any fundraising activity.

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

4. Processing of Company Announcements during peak periods
ASX would like to reiterate the guidance it gave in Companies Update 08/06 concerning the consideration that listed entities should give to the timing of lodging announcements with ASX surrounding peak periods throughout the trading day, such as prior to Market Open and Market Close. During these periods, the number of announcements handled by the Company Announcements Office increases, and therefore the time taken in processing the announcements is lengthier than may be the case during the rest of the day.
During these peak periods, in order to for an announcement to be processed prior to the required release time, listed entities should have regard to the following guidelines:

  • For an announcement that must be released prior to Market Open at 10:00am AEDT, the announcement should be submitted prior to 9:30am AEDT.
  • For an announcement that must be released prior to Market Close at 4:00pm AEDT, the announcement should be submitted prior to 3:40pm AEDT.

In addition, the nature of the announcement should also be considered as a factor that may affect how quickly the announcement can be released. More complex announcements may require further review by an Issuers Adviser prior to release to the market.

For more complex announcements of a critical nature, listed entities are advised to contact Company Announcements Office in advance if there are concerns with meeting the above guidelines.
If a company is going to lodge a materially price sensitive announcement before Market Open, but will not be able to submit it prior to 9.30 am AEDT, ASX strongly encourages the company to contact their Issuers Adviser so that the appropriate action can be taken in the event that the announcement cannot be lodged, processed, and released, before Market Open. If the announcement will be submitted just before Market Open, the announcement will still be in the process of being released at Market Open, and the opening of the company's securities should be delayed to take account of this. If the company will not be able to submit the announcement before the Market Open, it should request a Trading Halt until the announcement can be submitted and released.

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.