BRIEFING NOTE: ASX Compliance Update
12 March 2018
Last month the ASX released its first Compliance Update of 2018. Being the first update of the year, the information was mostly administrative but there were some interesting points raised and we’ve highlighted some of the key ones below.
Cryptocurrency listings and announcements
Understandably, being such a hot topic, the ASX has seen an increase in the number of enquiries about listing a business investing in cryptocurrencies (either through the traditional IPO method or through an initial coin offering (ICO)) or existing listed entities seeking to expand their operations into cryptocurrency-related services.
The ASX is still taking a cautionary approach to cryptocurrency-related businesses particularly given their regulatory status in many overseas jurisdictions is subject to considerable uncertainty and rapid change.
The ASX therefore took this opportunity to remind everybody that any business applying for listing (whether via an IPO or backdoor listing) must satisfy Listing Rule 1.1 condition 1 and must have a structure and operations appropriate for a listed company. With respect to cryptocurrency-related businesses, the ASX advised that the ASX must be satisfied that the business is bona fide and complies with all applicable legal requirements of the jurisdictions that they operate in.
Whittens’ Equity Capital Markets, Corporate Advisory and Company Secretarial teams have assisted multiple companies through the listing process and are experts in the requirements of the ASX and Corporations Act. If you need assistance listing or reorganising your cryptocurrency (or any other) business, please contact us here.
ASX Online – Price sensitivity
ASX Online is the platform which listed entities utilise to lodge announcements with ASX. At present, the platform does not permit entities to indicate whether an announcement should be considered “price sensitive” ($) or not, when considered and released by ASX.
From mid-2018, functionality will be introduced that will allow an entity to indicate if an announcement should be considered price sensitive by the ASX. This will assist the ASX Market Announcements Officer and the entity’s ASX Listing Adviser in their assessment as to whether an announcement should be classified price sensitive for public consumption.
At the same time the ASX will also introduce functionality that will allow an entity to indicate if an announcement materially relates to or affects another listed entity and therefore should be cross-released against the name of that entity.
Minimum issue price of securities under a combination of Listing Rule 7.1 and Listing Rule 7.1A
The ASX reminded listed entities that an entity issuing securities under Listing Rule 7.1A is required to issue those securities at a price no less than 75% of a 15 day VWAP. Furthermore, the ASX advised that it is alive to entities attempting to complete an issue using both their 7.1 and 7.1A capacities and using a lower issue price in their 7.1 allotment to give an overall average issue price of less than 75% of the 15 day VWAP. The ASX regards this as contrary to the spirit and intent of the Listing Rules and is likely to advise the entity that they cannot use their 7.1A capacity to make the issue.
Raising money and need assistance complying with the requirements of the ASX Listing Rules and Corporations Act? Whittens’ Equity Capital Markets, Corporate Advisory and Company Secretarial teams are experts in the field and available to help. You can contact us here.
The end of 2017 was a busy time for Whittens’ Equity Capital Markets Team and 2018 has started in the same fashion. Below are some highlights of our recent transactions:
|Feb 2018||We acted for Prospect Resources Limited (ASX:PSC) in connection with a $10 million placement to institutional and sophisticated investors. Prospect Resources is a lithium and gold exploration company with high-quality tenements located in Zimbabwe and surrounding regions.|
|Feb 2018||We acted for Livetiles Limited (ASX:LVT) in a $20 million placement to sophisticated and professional investors and a follow up Share Purchase Plan. LiveTiles is a fast growing Software as a Service business.|
|Dec 2017||We acted for NMG Corporation Limited, to be renamed “Acrow Formwork and Construction Services Limited” (ASX:NMG), in its reverse takeover of the Acrow group. The Acrow group includes Acrow Formwork & Scaffolding Pty Ltd, which is one of the largest formwork and scaffolding companies in Australia. The acquisition and $28m capital raising result in a transaction value of approximately $30m.|
|Dec 2017||We acted for Janison Education Group Limited, formerly HJB Corporation Limited (ASX:JAN) on its successful reverse takeover of Janison Solutions Pty Ltd. Janison has been developing innovative education technology solutions since being founded in 1998. The acquisition and associated capital raising resulted in the merged entity being listed on the ASX for a value of approximately $40m.|