RON CAMERON, Investor Relations

During November, the ASX released a compliance update that contained information on a strict new enforcement regime around the timing of periodic reports. Get it wrong and a listed company faces automatic suspension. The update also called out inappropriate use of the Markets Announcement Platform and how that may lead to shares being suspended.

The Listed@ASX Compliance Update no. 09/22 was released on the 3^rd of November to herald this crackdown by the ASX. The automatic suspension for failing to lodge periodic reports on time will come into force from the 31^st of January 2023.

The current state of play for periodic reports

Currently, if an entity fails to lodge periodic reporting documents with the ASX, such as Full and Half Year Reports, the Annual Report or Quarterly Reports, by the date on which they are due, the ASX will suspend that entity’s securities from quotation on the following trading day. In practice, however, if a periodic report is lodged after the Market Announcements office closes on the business day when the report is due, the ASX does not suspend trading in the entity’s securities if the report is available via the ASX at a reasonable time before the market opens on the next trading day.

The new regime for periodic reports

A key consideration for the ASX is ensuring listed entities keep the market informed, in a timely manner. So, to ensure the market has sufficient time to consider any periodic reports, the following rules will apply to periodic reports with a due date on, or after, the 31^st of January 2023.

• The reports must be lodged before the Market Announcements office closes on the business day when the report is due, or the entity’s securities will be suspended from trading on the next trading day.
• If the report is lodged between the closure of the Market Announcements office and the imposition of the suspension, the entity’s securities will normally be reinstated to quotation on the next trading day after the suspension is imposed.

The compliance update also clearly identifies mining, oil and gas and exploration companies that have additional reporting requirements as needing to comply with the new regime.

Inappropriate use of the Market Announcements Platform

The ASX also used the compliance update to remind entities that the Market Announcements Platform should not be used to publish material that is actually promotional, political, or tendentious in nature. Announcements should be factual, relevant, and expressed in a clear and objective manner. Emotive, intemperate, or defamatory language should not be used.

As noted in section 14 of ASX Guidance Note 14, the ASX may refuse to accept or publish an announcement that does not meet those standards. An entity will run the risk of being in breach of its continuous disclosure obligations which may lead to its securities being suspended.

If there is an occasion where an announcement is published that does not meet these standards, the ASX may require the entity to lodge a corrective announcement and can suspend trading in securities until the entity does so.

While the rules around the inappropriate use of the ASX Market Announcement Platform are not new, the ASX is clearly signaling, with fair warning, it is going to start strictly enforcing them.