In this update, we examine the powers of the ASX in Chapters 17 and 18 of the ASX Listing Rules. The substantial changes introduced to the Listing Rules on 1 December 2019, clarified and significantly expanded upon ASX’s general and enforcement powers. ASX has been displaying a willingness to exercise these powers, which is no more evident than its public stoush with iSignthis Limited.

While the exercise of power by other Australian regulators, such as ASIC, can generally be subject to challenge through administrative or judicial review, the ASX has established complete authority to enforce its Listing Rules, with limited if any capacity for judicial review.

ASX Amendments – Chapter 18 of the ASX Listing Rules

Listing Rule 18.5A expressly confers absolute discretion on the ASX regarding the application of the Listing Rules. ASX may exercise any power or discretion on any conditions it sees fit, and the entity must comply with those conditions.

The amendments to Listing Rule 18.7 empower the ASX to request any information, document or explanation to be verified under oath. This change will place a serious burden on market participants to be accurate in all their dealings with the ASX, as this power of requiring information under oath potentially creates serious consequences for those providing the information. We expect over time the use of this power will be very effective to hold participants more accountable for their behaviour. With the new Listing Rule 18.8A, ASX is given the power to censure listed companies that breach the Listing Rules or a condition imposed under the Listing Rules, and to publish the censure and the reasons for it to the market.

ASX’s powers and the allegations against iSignthis

ASX has been engaged in a highly unusual and public dispute with iSignthis, during which it has demonstrated its willingness to use its enforcement powers under the Listing Rules. Further details are set out in our full article, available here.

The power to request information from ASX Listed Companies and the process involved regarding suspension, demonstrates the extent of the powers of the ASX, as well as the limited recourse of ASX listed companies. Companies are therefore reminded to be vigilant in ensuring they are meeting their disclosure obligations to the market and complying with the ASX Listing Rules.

GRT Lawyers’ full article on the ASX’s powers can be accessed here.