Asx Limited · ASX:ASX
Asx — Investor Presentation (April 2013)
35 slides from Asx's investor presentation, April 2013
Slide 1: Continuous Disclosure - Guidance Note 8 Rewrite
Continuous Disclosure - Guidance Note 8 Rewrite Kevin Lewis April 2013 ASX Group Executive and Chief Compliance Officer
Slide 2: Outline
Outline The consultation process Core themes unchanged Clarifications to Guidance Note 8 Final changes to Listing Rules 3.1 – 3.1B Other important changes to chapter 3 of the Listing Rules Other minor Listing Rule changes Other Guidance Note changes Page 2
Slide 3: The consultation process
The consultation process A 2+ year process, which included: informal engagement with listed entities, directors, company secretaries, general counsel and other key stakeholders over an extended period to gain an understanding of major areas of concern or confusion comprehensive internal review
Slide 4: The consultation process (cont.)
The consultation process (cont.) Intensive program to socialise the proposed changes via: media interviews national roadshow presentations meetings with the 5 main state chapters of the Corporations Committee of the Law Council’s Business Law Section individual meetings with the AICD, CSA
Slide 5: The consultation process (cont.)
The consultation process (cont.) 19 non-confidential and 2 confidential submissions received in response to the formal consultation General feedback overwhelmingly positive A large number of specific comments on areas where ASX’s guidance could be enhanced or proposed listing rule changes coul
Slide 6: Core themes unchanged
Core themes unchanged LR 3.1 requires the immediate disclosure of “market sensitive” information (ie information concerning a listed entity that a reasonable person would expect to have a material effect on the price or value of its securities) unless it falls within the exceptions to immediate di
Slide 7: Core themes unchanged
Core themes unchanged “Immediately” does not mean “instantaneously”, but rather “promptly and without delay” The speed with which disclosure can be made will vary, depending on the circumstances eg: source, forewarning, amount and complexity of information need in some cases to verify the ac
Slide 8: Core themes unchanged (cont.)
Core themes unchanged (cont.) Given the requirement for announcements to be issued immediately, a listed entity should have suitable arrangements in place to enable this to occur (eg delegations to management, disclosure committee etc) Where necessary/appropriate, the requirement to act “immedia
Slide 9: Core themes unchanged (cont.)
Core themes unchanged (cont.) The “incomplete proposal or negotiation” exception generally means that a market sensitive agreement does not need to be disclosed until it is signed or the entity is otherwise committed to proceeding with the transaction (provided confidentiality is maintained) It’
Slide 10: Core themes unchanged (cont.)
Core themes unchanged (cont.) Contrary to the advice some lawyers have been giving, the “reasonable person” test does not generally require disclosure of confidential approaches to enter into a takeover or other control transaction - these usually will be protected from mandatory disclosure by LR
Slide 11: Core themes unchanged (cont.)
Core themes unchanged (cont.) A listed entity may have to make an announcement under LR 3.1 if its earnings will differ from market expectations to an extent that is market sensitive Former guidance that a 10–15% change is material withdrawn The market’s expectations for earnings may be set or
Slide 12: Core themes unchanged (cont.)
Core themes unchanged (cont.) A listed entity which has published earnings guidance and which is aware that its actual earnings are likely to differ materially from that guidance not only needs to consider its disclosure obligations under LR 3.1, but also its potential exposure for misleading and
Slide 13: Clarification #1 – "immediately"
Clarification # 1 – “immediately” “Promptly and without delay” means acting as quickly as you can in the circumstances (promptly) and not deferring, postponing or putting it off to a later time (without delay) Preparing an announcement necessarily takes time and a mere passing of time is not a “
Slide 14: Clarification #2 – when to use trading halts
Clarification # 2 – when to use trading halts Generally speaking, a trading halt will not be required if an announcement can be put out promptly and without delay ASX does not expect an entity to request a trading halt before it has assessed whether particular information is in fact market sensi
Slide 15: Clarification #3 – reasonable person test
Clarification # 3 – reasonable person test Given the general rule that information which falls within the prescribed categories in LR 3.1A.1 and which meets the confidentiality requirements in LR 3.1A.2 will also satisfy the reasonable person test in LR 3.1A.3, LR 3.1A.3 necessarily has a very nar
Slide 16: Clarification #4 – consensus forecasts
Clarification # 4 – consensus forecasts For an entity which does not publish earnings guidance and which is covered by sell-side analysts, those analyst forecasts collectively set or reflect market expectations for the entity’s earnings There are a number of approaches that an entity may legitim
Slide 17: Clarification #5 – out-dated earnings guidance
Clarification # 5 – out-dated earnings guidance In terms of ASX’s recommendation that entities use the accounting 5–10% materiality thresholds for determining whether their earnings guidance has become materially inaccurate: Smaller listed entities or those that have relatively variable earnings m
Slide 18: Clarification #6 – loss of confidentiality
Clarification # 6 – loss of confidentiality Absent a sudden and significant movement in market price that cannot be explained by other events, ASX will generally only regard confidentiality to have been lost in information about a matter that is the subject of a media or analyst report or market r
Slide 19: Clarification #6 – loss of confidentiality (cont.)
Clarification # 6 – loss of confidentiality (cont.) If the report/rumour includes some specific and accurate transaction details, ASX will generally expect the entity to confirm those details If the report/rumour includes some inaccurate transaction details, the response will depend on the circu
Slide 20: Clarification #7 – monitoring social media
Clarification # 7 – monitoring social media ASX does not expect a listed entity to be monitoring social media at large for comments or rumours about it ASX suggests monitoring in 2 specific scenarios – when a market sensitive announcement is pending or when an entity is close to finalising a mar
Slide 21: Final changes to LR 3.1 – 3.1B
Final changes to LR 3.1 – 3.1B Proceeding with minor amendments consulted upon: refining the examples of potentially disclosable information given in the notes to Listing Rule 3.1 reversing the order of the exceptions in Listing Rule 3.1A to de-emphasise the “reasonable person” test and make it
Slide 22: Other important changes to LR Chapter 3
Other important changes to LR Chapter 3 Proceeding with amendments consulted upon, but in most cases with significant changes to reflect consultation feedback (highlighted below in red). These were intended to impose specific disclosure obligations in relation to matters that ASX had previously trie
Slide 23: Other important changes to LR Chapter 3 (cont.)
Other important changes to LR Chapter 3 (cont.) non-executive director fees paid out of a pool of remuneration approved by security holders; superannuation contributions in relation to such fees; an increase in director fees approved by security holders periodic remuneration reviews in accor
Slide 24: Other important changes to LR Chapter 3 (cont.)
Other important changes to LR Chapter 3 (cont.) provisions (commonly referred to as “access arrangements”) allowing a chief executive officer or director access to entity records for a period of time after they cease to be a chief executive officer or director a bona fide employment, service or
Slide 25: Other important changes to LR Chapter 3 (cont.)
Other important changes to LR Chapter 3 (cont.) if it is established in Australia, a copy of any document it receives about a substantial holding of securities under Part 6C.2 of the Corps Act (tracing notices) that reveals materially different information to the most current information (if any)
Slide 26: Other important changes to LR Chapter 3 (cont.)
Other important changes to LR Chapter 3 (cont.) within 2 business days of receipt of: information about the material terms of any notice it receives under section 249D, 249F, 249N, 252B, 252D or 252L of the Corps Act or under any equivalent overseas law or equivalent provisions in the entity’s c
Slide 27: Other important changes to LR Chapter 3 (cont.)
Other important changes to LR Chapter 3 (cont.) if it is dual listed, of a copy of any document it gives to an overseas stock exchange that meets the following requirements: it is given to that overseas stock exchange in its capacity as an entity listed on that exchange; it is, or will be, mad
Slide 28: Other minor LR changes
Other minor LR changes Proceeding with all but one (LR 15.3) of the other minor LR amendments consulted upon, plus the following: new Appendix 1A, 1B and 1C application forms and listing agreements, supplemented by new online information forms and checklists relocating requirements for informati
Slide 29: Other Guidance Note changes: GN 1
Other Guidance Note changes: GN 1 Guidance Note 1 Applying for Admission – ASX Listings amended to: conform to GN 8, particularly the commentary about the person appointed under LR 1.1 condition 12 / LR 12.6 to be responsible for communications with ASX reflect the changes to the Appendix 1A a
Slide 30: Other Guidance Note changes: GN 1 (cont.)
Other Guidance Note changes: GN 1 (cont.) give more detailed guidance on the “profit test” in LR 1.2 and the “assets test” in LR 1.3 note that in certain cases ASX may require the disclosure of additional information under LR 1.17 about the qualifications and experience of the auditor of an enti
Slide 31: Other Guidance Note changes: GN 4
Other Guidance Note changes: GN 4 Guidance Note 4 Foreign Entities Listing on ASX amended to: conform to GN 8, particularly the commentary about the person appointed under LR 1.1 condition 12 / LR 12.6 to be responsible for communications with ASX reflect the changes to the Appendix 1A and 1C ap
Slide 32: Other Guidance Note changes: GN 4 (cont.)
Other Guidance Note changes: GN 4 (cont.) include guidance on certain disclosures that ASX will generally want to see in the listing prospectus or product disclosure statement of a foreign entity: place of incorporation a statement that: “As [name of entity] is not established in Australia, it
Slide 33: Other Guidance Note changes: GN 12
Other Guidance Note changes: GN 12 Guidance Note 12 Significant Changes to Activities amended to: conform to changes to GN 1, 4, 8 and 16 incorporate the amendments late last year to the minimum spread requirements in LR 1.1 condition 7 include some further guidance around the “20 cent rule” V
Slide 34: Other Guidance Note changes: GN 16
Other Guidance Note changes: GN 16 Guidance Note 16 Trading Halts and Voluntary Suspensions amended to: conform to the guidance in GN 8 on trading halts and voluntary suspensions repeat guidance in GN 8 for dual listed entities and the need for them to co- ordinate halts and suspensions across e
Slide 35: Other Guidance Note changes: GN 17
Other Guidance Note changes: GN 17 Guidance Note 17 Waivers and In-Principle Advice amended to: differentiate between “standard” and “non-standard” waiver requests implement a faster, more streamlined process for handling standard waiver requests (10 business days vs 20 business days) include