From later this year, ASX will refuse to list companies that
fall short of several more demanding tests that it intends to
introduce. ASX has seen an increase in unsatisfactory listing
applications during the past 18 months and recently announced
significant rule changes to refresh expectations for quality.
With a mooted more onerous net tangible assets test, market
capitalisation test, profit test and spread test, as well as new
qualitative criteria to be appropriate for listing and a minimum
free float requirement, ASX intends to pull all its regulatory
levers to lift quality. For back door listings, ASX is additionally
contemplating bringing forward the date of suspension from trading,
introducing a review fee, formalising an extended review period and
in all but exceptional circumstances requiring a prospectus rather
than an information memorandum. In this update Jeremy Wickens and
Cameron Bill explain the proposed changes and their
significance.
