30.10 2014

Changes to the ASX Guidance Note 17

Recently, the Australian Stock Exchange (ASX) released an updated version of Guidance Note 17 (GN17) to the ASX Listing Rules (Listing Rules), which can be accessed here.

ASX has previously stated that it is not concerned with inhibiting legitimate commercial transactions that are consistent with the principles upon which the Listing Rules are based. Consequently ASX will use its discretion in various circumstances, to waive certain Listing Rules, or parts thereof. GN17 provides an overview of how ASX deals with applications for waivers of the Listing Rules and requests for in-principle advice.

Standard vs non-standard waivers

Annexed to GN17 is a list of ‘standard waivers’. These are waivers that have been granted on numerous occasions and which ASX considers are not inconsistent with the principles on which the Listing Rules are based or the policy underlying the particular rule in question. Any other form of waiver that does not appear in the annexure to GN17 will be considered a ‘non-standard waiver’.

The revised GN17 confirms that ASX will generally grant a standard waiver upon request, without requiring detailed submissions in support of the application.

Standard waiver applications need only include a brief explanation of the transaction, event or circumstance giving rise to the need for the waiver and identify, by reference to the annexure to GN17, which specific waiver is being sought. This is a far more streamlined process, in comparison to the mandated requirements that must be fulfilled by an applicant seeking a non-standard waiver.

New standard waivers

As part of its revisions, ASX has also introduced three new standard waivers in the annexure to GN17, which are outlined below.

Waiver from Listing Rule 7.1 – Dividend or distribution reinvestment plan

A standard waiver from compliance with Listing Rule 7.1 is now available where an entity seeks, without first obtaining shareholder approval, to issue securities pursuant to an underwriting agreement for the entity’s dividend or distribution reinvestment plan (DRP) in respect of the next upcoming DRP only. For this waiver to apply:

  • the underwritten securities must be issued no later than 15 business days after the dividend or distribution payment date;
  • related parties and their associates must not act as underwriter or sub-underwriters to the DRP unless they obtain prior shareholder approval (under Listing Rule 10.11);
  • the DRP must not contain a limit on shareholder participation; and
  • any securities issued in accordance with the instructions of the underwriter or sub-underwriter must be issued at a price equal to or greater than the price at which other securities under the DRP are issued.

Waiver from Listing Rule 14.7 – Issuing securities outside of mandated time period

Where an entity’s securities are suspended from official quotation following the appointment of an administrator and:

  • creditors have agreed to the restructure and recapitalisation of the entity pursuant to a deed of company arrangement, which proposes an issue of securities that requires shareholder approval under:
    • Listing Rule 7.1, and the notice of meeting includes a statement that the securities will be issued no later than three months after the date of the meeting (required by Listing Rule 7.3.2); or
    • Listing Rule 10.11, and the notice of meeting includes a statement that the securities will be issued no later than one month after the date of the meeting (required by Listing Rule 10.13.3); and
  • the entity’s securities remain suspended, pending compliance with the requirements for continued quotation (under Listing Rules 12.1 and 12.2),

a standard waiver from Listing Rule 14.7 is now available, which permits the securities to be issued outside of the mandated timeframe recorded in the notice of meeting.

This waiver is only available if the relevant securities are issued before the suspension is lifted and on the same terms and conditions approved by the shareholders. Additionally, the circumstances of the entity must not have materially changed since shareholders approved the issue of the securities.

Waiver from Listing Rule 14.7 – Voting exclusion statement

ASX has introduced a new standard waiver from compliance with Listing Rule 14.7, which, under certain circumstances, permits an entity to not comply with a voting exclusion statement in its notice of meeting, in relation to a proposed resolution to ratify or approve an issue of securities for the purposes of the Listing Rules.

This waiver allows for the votes of shareholders who participated or propose to participate in the issue of securities to be counted, if and only to the extent that those shareholders (Nominee Holders) are acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of beneficiaries who did not or will not participate in the issue.

In order for the waiver to apply, certain conditions must be met, including:

  • that the beneficiaries provide written confirmation to the Nominee Holders that they did not or will not participate in the relevant issue of securities;
  • that the beneficiaries direct the Nominee Holders how to vote on the resolution;
  • that the Nominee Holders do not exercise discretion in casting their vote; and
  • that the terms of the wavier be immediately released to the market.

Appeals from waiver decisions

Where a waiver is denied by ASX, or certain objectionable conditions are imposed upon the waiver, applicants are entitled to lodge an appeal. Revised GN17 now clarifies that appeals will be subject to a fee of $5,000 and lodgement of written notice with the ASX Appeals Tribunal within 10 business days of the relevant decision being sent to the applicant.

Further information about the appeal process can be found in Guidance Note 21.

Concluding remarks

It is important to note that ASX reserves the right to treat any application as a non-standard waiver, notwithstanding that the relevant waiver appears in the annexure to GN17. Under no circumstances should a guidance note be treated as conclusive evidence of the manner in which ASX will interpret or apply the Listing Rules.

Should you wish to make an application for a waiver, or if you require advice in relation to how the Listing Rules will be applied to your circumstances, please contact GRT Lawyers.


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