IN BRIEF
An ASX Media Release on 12 May 2016 set out a number of changes,
both immediate and proposed, to the admission requirements to the
official ASX list. The changes are intended to "maintain and
strengthen the reputation" of the ASX. However one of the side
effects is that the changes will make listings more difficult for
small companies.
REVERSE TAKEOVERS
Recently there has been a perception that RTOs are an easier and
cheaper way for small businesses to list. Because of this, the RTO
pathway has been a preferred listing option for many small
businesses.
Some of the ASX rule changes relate to how the ASX regulates
RTOs, otherwise known as backdoor listings.
The ASX no longer grants companies waivers of the 20 cent
minimum price rule which, in circumstances where their securities
are trading at less than two cents each, will prevent those
companies from using the backdoor listing process.
