ASX price sensitivity and cross-release indication of announcements
This article provides a summary of functionality changes to the ASX Online markets announcements platform (MAP) that became active on and from 6 August 2018.
ASX is introducing two additional functionalities to the MAP for an entity to provide an indication as to whether an announcement lodged for release to market:
- is “market sensitive” or “non-sensitive”;
- materially relates to or affects another listed entity and therefore should be cross-released against the name of that entity on the MAP.
Indication of market sensitivity
When releasing an announcement, an entity will be expected to indicate whether the announcement is market sensitive or not. This function was previously performed solely by the ASX administrators of MAP.
Whether an announcement is market sensitive depends on the circumstances of the entity and the information contained in the announcement. If an announcement contains new material information it is generally presumed to be market sensitive, whereas procedural or update announcements are generally not marked price sensitive.
ASX has advised certain announcements will default to being market sensitive, including periodic reports and matters related to takeovers. The indication of market sensitivity provided by the entity is an indication only and ASX will make the final determination on the market sensitivity of a submitted announcement.
The below announcement types have historically generally been considered market sensitive:
- changes in the Board and Senior Management of an entity, including shareholder requisition notices;
- investor presentations and general company updates, including on previously announced activities such as acquisitions/disposals and a capital raising (dependent on content);
- supplementary/replacement prospectuses; and
- completion/issue of shares under a capital raising (not including the associated Appendix 3B).
The below announcement types have historically generally been considered not to be market sensitive:
- notices with respect to substantial shareholders;
- updated documents, such as an amended constitution;
- procedural announcements such as:
- Appendix 3B, 3X, 3Y, 3Z;
- cancellation of unlisted options;
- grant by ASX of a waiver of a Listing Rule;
- documents ancillary to a prospectus, for example notices to optionholders/ineligible shareholders and the dispatch of relevant documentation in the case of an entitlement offer; and
- notices of meeting and results of meeting, even if resolutions relate to price sensitive matters (for example, shareholder approval of an acquisition or the issue/ratification of shares for a capital raising). This includes matters ancillary to such meeting, including Chair addresses and presentations.
While best practice in the event of uncertainty may be to mark an announcement as market sensitive, doing so may have consequences in terms of corporate governance matters relevant to the entity, for example trading restrictions under the Securities Trading Policy. We recommend documenting the decision-making process when considering the market-sensitivity or otherwise of an announcement.
Announcements relating to another listed entity
A further additional function to ASX Online will be to enable a listed entity to indicate whether the announcement lodged also materially relates to or affect another listed entity and therefore should be cross-released against the name of that entity on the MAP. ASX will make the final determination as to whether the announcement is cross-released.
A key indicator as to whether an announcement ought to be cross-released is whether the other listed entity is named in the announcement. The relationship between the parties may also indicate an announcement ought to be cross-released, for example if drilling results are received in respect of exploration the subject of a joint venture. As these kind of announcements generally have input from both parties, there is an opportunity to raise the possibility of cross-release during the drafting process.
Should you have any questions please do not hesitate to contact Patrick Gowans or Paul Godfrey at Quinert Rodda & Associates on (03) 8692 9000.
The information in this article is provided for informative purposes only – it does not constitute legal advice. If you have any further questions on this issue, please contact our office.