AUSTRALIA: ASX Consults on Updated Admission Requirements for Listed Entities

Thursday May 12 2016

On 12^th May 2016, ASX released a consultation paper on proposed changes to its requirements for admission to the ASX official list. The changes are designed to maintain and strengthen the reputation of ASX as a market of quality and integrity. The key proposals on which feedback is sought include:

• Increasing the financial thresholds for listing – in particular lifting the “assets test” thresholds from net tangible assets of $3 million or a market capitalisation of $10 million to an NTA of $5 million or a market cap of $20 million
• Introducing a 20% minimum free float requirement and changing the spread test to better demonstrate a sufficient level of investor interest in the entity and its securities to justify listing
• Making the minimum $1.5 million working capital requirements consistent across all entities admitted under the assets test
• Introducing a requirement for entities admitted under the assets test to provide audited accounts for the last three full financial years, unless ASX agrees otherwise.

ASX is also updating some of its procedures and guidance to address emerging issues with backdoor listings. Trading in the securities of an entity that announces a backdoor listing will now be suspended at the point of announcement. The suspension will continue until the entity has recompiled with ASX’s admission requirements. This puts backdoor listings on the same footing as front door listings.

Click on the link above for further details.