ASX Compliance Update

In brief - in response to the COVID-19 pandemic, the ASX has advised that it is proposing a temporary emergency class order waiver under listing rule 18.1 (Class Waiver) to help facilitate capital raisings up to 31 July 2020

It is proposed that the Class Waiver will:

• permit an entity to request two consecutive trading halts, allowing it a total of up to 4 trading days in halt to consider, plan for and execute a capital raising. If it is not able to complete its capital raising within those 4 trading days, the entity may need to request a voluntary suspension to afford it the time to complete the raise; 
• increase the 15% placement capacity under Listing Rule 7.1 to a one-off placement of 25%, provided it is followed by a pro rata entitlement offer under exceptions 1, 2 and/ or 3 of Listing Rule 7.2 or an offer to retail investors under an SPP (in both cases, at the same or a lower price than the placement price); and
• waive the one-for-one cap on non-renounceable entitlement offers and rights issues set out in Listing Rule 7.11.3 and instead permit the entity to choose a ratio that meets its capital raising needs and that is fair and reasonable in the circumstances.

To access back to back trading halts, entities simply need to make it clear in their request for a trading halt that they are seeking two consecutive halts of two days each for the purpose of considering a capital raising. Entities should be aware that back to back halts will not be permitted for purposes other than raising capital.

For the avoidance of doubt, entities that already have the extra 10% placement capacity under Listing Rule 7.1A will be able to elect to use their existing capacity obtained under 7.1A or the extra 10% placement capacity afforded under the Class Waiver, but not both.