ASX Listing Rules

The ASX Listing Rules are a set of requirements that entities listed on the Australian Securities Exchange (ASX) agree to comply with.

“In accepting the benefits of access to the ASX market, listed entities and their officers should also recognise that they assume a concomitant responsibility to the market and investors in that market,” the introduction to the ASX Listing Rules states.

The scope of the ASX Listing Rules includes the conduct of listed entities, reporting requirements and criteria for admission on the exchange.

If an ASX-listed entity fails to comply with the rules it may be suspended from quotation. The ASX Listing Rules are enforceable by courts under the Corporations Act.

Principles underpinning the ASX Listing Rules

The ASX Listing Rules state seven principles that underpin them:

• An entity should satisfy appropriate minimum standards of quality, size and operations before it is admitted to the official list and disclose sufficient information about itself to allow an informed market in its securities once they are quoted.

• Sufficient investor interest in an entity’s securities should be demonstrated before it is admitted to the official list and its securities are quoted.

• Securities should be issued in circumstances, and have rights and obligations attaching to them, that are fair to new and existing security holders.

• Timely disclosure should be made of information which may have a material effect on the price or value of an entity’s securities.

• Financial statements should be produced in accordance with acceptable accounting and auditing standards.

• An entity should disclose information about its corporate governance practices and explain any departure from generally accepted standards of good corporate governance.

• The practices adopted in relation to meetings of security holders should allow security holders the opportunity to express their views openly to the board and management.

• Certain significant transactions should require security holder approval.

The ASX says the rules are not intended to be applied in a mechanistic way. They should be interpreted in accordance with their spirit, intention or purpose; by looking beyond form to substance; and in a way that best promotes the principles that underpin them.

Guidance notes

In addition to the ASX Listing Rules themselves, the ASX provides a series of guidance notes to assist entities listed on the exchange with the practical application of the rules.

Continuous disclosure

The ASX Listing Rules cover continuous disclosure requirements. The general rule is that a listed entity once it becomes aware of any information that would be reasonably expected to have a material effect on the price of its securities, it must immediately tell the ASX that information. These public disclosures are made available on the entity’s page on the ASX website.

Waivers

The ASX Listing Rules give the ASX the power to grant waivers to the listing rules (unless the rule specifies the ASX will not waive it).

According to the guidance note on waivers, to grant a waiver the ASX must be satisfied the waiver is consistent with:

• the ASX’s statutory obligations;

• the principles on which the rules are based;

• the policy underlying the rule to be waived; and

• that it will not adversely affect the reputation, integrity or efficiency of the ASX.

2019 amendments

In 2019, the ASX made a significant suite of revisions to the ASX Listing Rules. Some of the areas covered by these changes were Listing Rule approvals, equity grants to directors, approvals for certain issues of securities, voting by employee share trusts, ASX powers, ASX censure, announcements and the role of the company secretary.