What's changing?

ASX has in the past agreed to requests by a listed entity for a trading halt to help facilitate a bookbuild process for a sale by an existing security holder of a major stake in the entity. Typically the halt has lasted for the period needed by the seller to complete the sale and for the entity to announce the final sale price to the market (up to the maximum period permitted for a trading halt of 2 trading days).

From 31 March 2017, ASX will no longer be agreeing to requests for a trading halt for these purposes. This reflects the general principle outlined in ASX Listing Rules Guidance Note 16 Trading Halts and Voluntary Suspensions that interruptions to trading should be kept to a minimum and therefore a trading halt should only be permitted where there is a material risk that trading in a particular security might occur while the market as a whole is not reasonably informed or where it is needed to correct or prevent a false or disorderly market.

It should be noted that the seller of a major stake in a listed entity will have a legal obligation to ensure that the sale takes place in accordance with insider trading laws. The broker acting for the seller will also have a legal obligation not to do anything in connection with the sale that might cause the market to become disorderly. In some situations, compliance with these obligations may require the bookbuild for the sale to be conducted during a period where any non-public market sensitive information concerning the entity has been disclosed and outside of normal ASX operating hours.

For the avoidance of doubt, this change in policy does not affect ASX’s preparedness to grant trading halts to facilitate significant capital raisings by listed entities.

An update to Listing Rules Guidance Note 16 has been published on the ASX website reflecting the changed policy above. It can be viewed at:

http://www.asx.com.au/documents/rules/gn16_trading_halts.pdf

What do I need to do by when?

Participants should ensure this notice is brought to the attention of the appropriate areas of their business (including their trading and client facilitation desks and corporate advisory and equity capital markets teams).

Need more information?

Issued by

Bill Woods, Principal Adviser

Contact information

Bill Woods
+61 (02)  9227 0000
info@asx.com.au

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