Business
Region : Continuous Disclosure Policy
Region : Continuous Disclosure
About this update from Region Group
Continuous Disclosure Policy Owner Company Secretary / Chief Legal and Investment Officer Application Region Version 11 Version Date June 2024 Next Review Date June 2026 Continuous Disclosure Policy Contents 1. Background 4 2. Purpose ............................................................................................................................................................................. 4 3. Legal requirements and best practice 4 3.1 Legal requirements 4 3.2 Exceptions to disclosure 5 3.3 ASX may request information to correct a false market 7 3.4 Contraventions and liability 7 3.5 This Policy 7 4. Disclosure principle 7 5. Material Price Sensitive Information 8 5.1 Determining Material Price Sensitive Information 8 5.2 Determining material price sensitive information 9 5.3 Potential examples of Material Price Sensitive Information 10 6. Roles and responsibilities - at a glance 11 7. Disclosure Committee 12 8. Disclosure Officer 12 9. Authorised Spokespersons 13 10. Region announcements - the procedures 14 10.1 Capturing information 14 10.2 Disclosure process 14 10.3 Announcement contents (including forward-looking statements) 16 11. Joint Announcements 16 12. No selective disclosure 16 13. Timing 16 14. Communication of announcements 16 15. Communication "black-out" periods - pre-results 17 16. Media and market speculation 17 17. Briefings/meetings/ conference calls with analysts or investors 17 18. Broker sponsored investor conferences 18 19. Responding to analyst reports and forecasts 18 20. Chat rooms, blogs and social networking sites 19 21. Responding to unexpected questions 20 22. Inadvertent disclosure of information 20 23. Trading halts and holding announcements 20 Continuous Disclosure Policy Contents continued 24. Confidentiality and response to loss of confidentiality ...............................................................................21 24.1 Maintaining confidentiality 21 24.2 Loss of confidentiality 21 25. Infringement notices and statement of reasons 22 26. Advisers and consultants 22 27. Breach of this Policy 22 28. Review, further information and definitions 22 28.1 Definitions 23 3 | 1. Background Region comprises Region Management Trust, Region Retail Trust (together, Trusts), Region RE Limited (" Region RE ") and any entities owned and / or managed, either beneficially or legally, by the Trusts or Region RE (" Region "). 2. Purpose The purpose of this Continuous Disclosure Policy is to: assist Region in complying with its continuous disclosure obligations under the Corporations Act 2001 (Cth) (" Corporations Act" ), and the Australian Securities Exchange (" ASX" ) Listing Rules; establish a framework to enable Region RE to provide unitholders and the market generally with timely, direct and equal access to material information about Region, including its financial position, performance, ownership and governance; and promote investor confidence in the integrity of Region and its securities through the application of disciplined disclosure procedures by its Directors and employees. 3. Legal requirements and best practice 3.1 Legal requirements Region is an ASX listed stapled unit trust, comprising one unit in the Region Retail Trust (ARSN 160 612 and one unit in the Region Management Trust (ARSN 160 612 626) and trading on the ASX under the Code RGN. It is subject to continuous disclosure requirements under the Corporations Act and the 4 | Continuous Disclosure Policy ASX Listing Rules (which are given legislative force under Section 674 of the Corporations Act), in addition to periodic and specific disclosure requirements. 3.1.1 The disclosure requirement The primary continuous disclosure obligation is contained in ASX Listing Rule 3.1, which states that: "Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities, the entity must immediately tell ASX that information." Region is also required to immediately provide information to the ASX if the ASX considers that there is or is likely to be a false market in Region's securities and asks Region to provide that information to correct or prevent a false market, pursuant to ASX Listing Rule 3.1B. 3.1.2 What is material price sensitive information? Under the ASX Listing Rules and Section 677 of the Corporations Act, a reasonable person is taken to expect that information would have a material effect (upwards or downwards) on the price or value of Region's securities if that information would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of Region's securities. This information is referred to as " Material Price Sensitive Information " in this Policy. The ASX Listing Rules do not define when information will be considered to have the necessary influence on investors, however some guidance is provided (see Section 5 of this Policy for further discussion on the Continuous Disclosure Policy concept of Material Price Sensitive Information). 3.1.3 When is Region aware of information? Under ASX Listing Rule 19.12, Region becomes aware of information if a director, secretary or officer of Region has, or ought reasonably to have, come into possession of information in the course of the performance of their duties as a director, secretary or officer of Region. An officer of Region would include a person concerned in, or taking part in, the management of Region. To assist Region in meeting its continuous disclosure obligations, one of the aims of this Policy is to ensure that relevant information is reported and escalated to appropriate persons within Region, such that the Directors, secretaries and officers actually become aware of information for which they are deemed to be aware. 3.1.4 What does immediately mean? ASX guidance says this is "promptly and without delay" being "as quickly as it can be done in the circumstances (acting promptly) and not deferring, postponing or putting off to a later time (acting without delay)". Where Board or Disclosure Committee approval must be obtained prior to the announcement being released to the ASX, Region RE will consider whether it should request from the ASX a trading halt or, in exceptional circumstances, a voluntary suspension (see Section 23 on Trading Halts). 3.1.5 Disclosure to ASX first Region must ensure it does not communicate Material Price Sensitive Information to an external party that is for release to the ASX until it has given the information to the ASX, and has received an 5 | acknowledgment from ASX that the information has been released to the market (refer ASX Listing Rule 15.7). 3.2 Exceptions to disclosure ASX Listing Rule 3.1A contains an exception to ASX Listing Rule 3.1, such that disclosure is not required where each of the following three tests are satisfied: 3.2.1 Test 1 One or more of the following applies: It would be a breach of a law to disclose the information. The information concerns an incomplete proposal or negotiation. The information comprises matters of supposition or is insufficiently definite to warrant disclosure. The information is generated for internal management purposes of the entity. The information is a trade secret. The ASX guidance clarifies each of the above conditions and in relation to (ii) provides that a proposal is incomplete unless and until Region has adopted it and is committed to proceeding with it. Negotiations are incomplete unless and until they result in a legally binding agreement or the entity is otherwise committed to proceeding with the transaction being negotiated. An agreement (otherwise disclosable) subject to conditions precedent or subsequent should be disclosed at the time the agreement is entered into (for example, at the time the agreement is signed) and not the satisfaction of the conditions. Continuous Disclosure Policy 3.2.2 Test 2 The following apply: the information is confidential; and the ASX has not formed the view that the information has ceased to be confidential. The ASX guidance equates "confidential" with "secret" and views information to be confidential if: it is known to only a limited number of people; the people who know the information understand that it is to be treated in confidence and only to be used for a permitted purpose; and those people abide by that understanding. ASX may consider confidentiality has been lost and require disclosure where a rumour/report is reasonably specific and reasonably accurate or there is a spike in trading not explained by other events or circumstances (see Section 24 of this Policy for details). 3.2.3 Test 3 A reasonable person would not expect the information to be disclosed. The reasonable person test is an objective standard to be judged from the perspective of an independent and judicious bystander and not from the perspective of someone whose interests are aligned with Region or the investment community. ASX guidance notes that the reasonable person test is narrow in its operations and will usually be satisfied where tests 1 and 2 above are met. A reasonable person, however, would expect an entity to give full and 6 | complete disclosure and not to "cherry- pick", disclosing good news but not bad news, rendering the announcement incomplete and/or misleading. Region must meet its continuous disclosure obligation as soon as any one of Tests 1, 2 or 3 is no longer satisfied. This means that the availability of the exception must be assessed by Region RE on an ongoing basis in relation to any Material Price Sensitive Information that has not been disclosed to the ASX. For example, any information that is not confidential will not qualify for the exceptions from disclosure. Therefore, it is essential that information withheld from the market remains subject to strict confidentiality procedures and is not leaked. If the information is leaked, even in breach of an obligation of confidentiality, it is no longer confidential and must be disclosed to the ASX. Even if information has not been technically leaked, the ASX may consider that it is no longer confidential, in which case it must also be disclosed to the ASX. Section 24 of this Policy discusses the maintenance and response to loss of confidentiality further. Similarly, in the case of reliance on the information being an incomplete proposal or negotiation, and the proposal or negotiation is then finalised, Region RE will need to ensure that the information is disclosed immediately or arrange for a trading halt to be requested until the information can be disclosed. See Section 23 of this Policy regarding the use of trading halts to facilitate continuous disclosure compliance. Continuous Disclosure Policy 3.3 ASX may request information to correct a false market ASX Listing Rule 3.1B provides that if the ASX considers that there is, or is likely to be, a false market in Region's securities, and requests information from Region RE to correct or prevent the false market, Region RE must immediately give the ASX that information. Region RE is required to provide this information even if the exception to disclosure (as set out in Section 3.2 of this Policy) applies. The ASX is likely to consider that there is, or is likely to be, a false market in Region's securities if: Region RE has information that has not been released to the market (eg, because the exception to disclosure (as set out in Section 3.2 of this Policy) applies); there is a reasonably specific rumour or media comment in relation to Region that has not been confirmed or clarified by an announcement to the market; and there is evidence that the rumour or comment is having, or the ASX forms a view that the rumour or comment is likely to have, an impact on the price of Region's securities. 3.4 Contraventions and liability If Region RE contravenes its continuous disclosure obligations, it may face criminal and civil liability under the Corporations Act (including by way of a shareholder class action). The Australian Securities and Investments Commission (" ASIC" ) can also institute proceedings under the Australian Securities and Investments Commission Act 7 | 2001 (Cth) . The Corporations Act also empowers ASIC to issue infringement notices for contraventions of the continuous disclosure obligations, impose penalties (in Region's case) of up to $100,000 for each infringement notice. Region RE's officers (including its Directors and employees) and advisers who are involved in a contravention by Region RE may face civil liability and, if they aid, abet, or are in any way knowingly concerned in Region RE's contravention, may be criminally liable under the Criminal Code. 3.5 This Policy This Policy contains all current continuous disclosure requirements under the ASX Listing Rules and the Corporations Act and incorporates various best practice guidelines suggested by market regulators and participants. This Policy has been reviewed and recommended by the Audit, Risk Management and Compliance Committee (" ARMCC" ) and reviewed and adopted by the Board. This Policy is managed by the Company Secretary, who is responsible for recommending amendments to this Policy as it applies to various matters from time to time. 4. Disclosure principle Promptly and without delay after Region RE becomes aware of any Material Price Sensitive Information, it will notify the market via an announcement to the ASX, unless exempted from doing so by the ASX Listing Rules. In this Policy, Material Price Sensitive Information that is not exempted from disclosure and that has not previously been Continuous Disclosure Policy disclosed by Region RE to the ASX is referred to as " Disclosable Information ". 5. Material Price Sensitive Information 5.1 Determining Material Price Sensitive Information Section 3.1 of this Policy refers to Material Price Sensitive Information as being information that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of Region's securities 1 . To assist in determining whether information is Material Price Sensitive Information, the ASX has provided guidance 2 by way of: examples of information that may be material price sensitive information (refer to Section 5.3 of this Policy); and qualitative and quantitative tests. 5.1.1 Qualitative tests 3 Where it is difficult to determine the materiality of information, the guidance suggests that Officers consider the following questions: Would this information influence my decision to buy or sell Region securities at their current market price? Would I feel exposed to an action for insider trading if I were to buy or sell Region securities at their current market price, knowing that this information had not yet been disclosed to the market? Other qualitative tests include: would the matter significantly affect Region's image, reputation or ability to carry on business; and consideration of the broader context of the information ie any particular circumstances affecting Region at the time 4 . 5.1.2 Quantitative test 5 ASX Guidance Note 8 states that when retrospectively considering if information was market sensitive (as the ASX does for the purpose of assessing breaches of Listing Rule 3.1), any movement in price or value of an entity's securities 6 is considered as follows: 10% or more, the ASX will generally regard that as confirmation that the information was market sensitive; or 5% or less, the ASX will generally regard that as confirmation that the information was not market sensitive. Where the price movement was between 5- 10%, the ASX considers circumstances including: the nature & significance of information; Region's market capitalisation; This test is set out in Section 677 of the Corporations Act and is an objective test ASX Listing Rule 3.1 and Guidance Note 8 ASX Guidance Note 8, Section 4.2 ASX Guidance Note 8, Section 4.3 ASX Guidance Note 8, Sections 4.2 & 8.7. The ASX applies the materiality thresholds of 5 / 10% as set out in former AASB 1031 - materiality as reasonable thresholds of materiality In applying this test to disclosure in relation to earnings surprises, the quantum of movement applies to RGN's earnings 8 | Continuous Disclosure Policy the beta of Region's units; and the bid-offer spread at which Region's units normally trade 7 . ASX guidance suggests that listed entities should consider this same quantitative test (prospectively) as part of the assessment process in determining if information is Material Price Sensitive Information 8 . As noted at Section 3.4 of this Policy, Region RE and its officers may face significant penalties if Region RE's continuous disclosure obligations are not met. In addition, there is a significant risk to Region RE from shareholder class actions. Region RE must exercise caution in assessing whether information is Material Price Sensitive Information or falls within one of the exceptions to disclosure provided by Listing Rule 3.1A (and described at Section 3.2 of this Policy). 5.1.3 Determining whether an earnings surprise is Material Price Sensitive Information would have a material effect on the price or value of Region's units. For listed entities that publish earnings guidance 10 the ASX guidance suggests using the quantitative test 11 , where, unless there is evidence or a convincing argument to the contrary 12 : an expected earnings variance of more than 10% is likely to be material (with the result that the guidance needs to be updated); and an expected earnings variation of less than 5% being unlikely to be material (with the result that guidance does not need to be updated). The materiality of an earnings variation between 5-10% will depend on the circumstances. For example, if an entity has stable or predictable earnings, a material threshold closer to 5% may be appropriate. The ASX has provided specific guidance for managing disclosure around earnings guidance/earnings surprises 9 . If Region becomes aware that its earnings for the current reporting period will differ from market expectations, careful consideration will need to be given to whether there is an obligation to notify the market of that fact, ie consideration will need to be given as to whether the change in earnings guidance 7 ASX Listing Rules Guidance Note 8, Section 8.7 5.2 Determining material price sensitive information Subject to the Board's supervision, the Disclosure Committee (see Section 7 of this Policy) is responsible for making decisions about whether information is Material Price Sensitive Information to be disclosed to the market. Where there is doubt as to whether certain information should be disclosed, the Disclosure Committee may seek external advice. The ASX also notes that this quantitative test does not displace the test for materiality in Section 677 of the Corporation Act ASX Listing Rules Guidance Note 8, Section 7 ASX Guidance Note 8, Section 7.3 ("How does an entity determine what the market is expecting its earnings for the current reporting period to be?"), sets out the different ways that the ASX views the expectations of an entity's earnings guidance can be set The materiality thresholds are the same as those used in Section 5.1 of this Policy, however, the thresholds apply to movement against current earnings See ASX Listing Rules Guidance Note 8, Section 7.3 ("What is a market sensitive difference for this purpose?") for qualitative considerations 9 | Continuous Disclosure Policy 5.3 Potential examples of Material Price Sensitive Information The following list provides a guide as to the type of information that may require disclosure. This is not an exhaustive list and the determination of whether certain information is Material Price Sensitive Information which is subject to continuous disclosure necessarily involves the use of judgment. Subject to the Board's supervision, decisions on disclosure issues are for the Disclosure Committee to resolve. Matters which may require disclosure, if material, include: a matter that might affect Region's ability to carry on business, or that might have a material effect on future activity; a matter that might have a material effect on income, cash flow or the ability to generate profits (including where there would be a long-term effect even if the effect in any one year is not material); a transaction that will lead to a significant change in the nature or scale of Region or the entity's activities (see also ASX Listing Rule 11.1 and Guidance note 12 on Significant Changes to Activities); the entry into, variation or termination of a material agreement; a matter involving any proposed change in regulation or law that could materially affect Region's business; a matter involving a significant allegation of any breach of the law, whether civil or criminal, by Region RE or any of its Directors or employees; 10 | a change in Region's financial forecasts or expectations, including that Region's earnings will be materially different from market expectations (see further details at Section 5.1 of this Policy); changes (or proposed changes) to Region RE's Board of Directors, senior executives or auditors (to the extent mandatory disclosure is not required by ASX Listing Rule 3.16); a material change in Region's accounting policy; an agreement between a member of Region (or a related party or subsidiary) and a Director (or a related party of the Director) (to the extent mandatory disclosure is not required by ASX Listing Rule 3.16.4); events regarding Region's securities (e.g. under or over subscriptions to an issue of securities, or a unit repurchase program, to the extent mandatory disclosure is not required under ASX listing rules 3.10.3 to 3.10.3C); events regarding Region's financing entitling a financier to terminate a material financing facility (e.g. a default or a review event); giving or receiving a notice of intention to make a takeover; a material acquisition or disposal; mergers, acquisitions/divestments, joint ventures or changes in assets; developments in regard to projects or ventures; becoming a plaintiff or a defendant in a material lawsuit;