Beware the Scope of ASX Listing Rule 7.1A

ASX Listing Rule 7.1A

ASX Listing Rule 7.1A was introduced in 2012 and enables eligible entities to issue up to a further 10% of their issued share capital, over and above the 15% placement capacity specified in ASX Listing Rule 7.1.

It applies to entities which are not included in the S&P/ASX300 index and which have a market capitalisation equal to or less than $300 million.

Shareholder approval of additional capacity under ASX Listing Rule 7.1A may only be obtained at the entity's Annual General Meeting and must be passed by a 75% majority.

ASX Listing Rule 7.1A.3 further provides that any equity securities issued under ASX Listing Rule 7.1A must be in an existing quoted class of the entity's equity securities.