After wide media reporting, the ASX has confirmed its plan to raise the bar for ASX listings.
The Consultation Paper released by the ASX late last week repeatedly cites “maintaining the quality and integrity of the ASX market” as the rationale for the stringent changes. ASX seems to have taken the view that a company’s size is determinative of quality and that market integrity can only be achieved through arbitrarily determining whether a company is “big” enough to list. Some might question this approach – perhaps validly so.
The ASX announcement has also left the corporate world wondering how the changes will impact the so-called “innovation nation”.
There are a number of proposed changes to the listing rules and guidance notes which are expected to come into effect on 1 September 2016. Additionally, key policy and process changes (which are not specifically related to the listing rules) will be implemented immediately.
The changes will have significant impacts on companies which are seeking to be admitted to the official list, whether by an IPO or backdoor listing. While it is clear that start-ups will be the ones that suffer most, all companies which have been considering listing on the ASX, may need to reassess how they can achieve that.
Our concise report - ASX listing changes: Does size really equate to quality? - detailing the immediate and proposed changes to be implemented by the ASX, as well as commentary from HopgoodGanim Lawyers' Corporate Advisory & Governance team, can be found at the link below.