• Key changes to the ASX listing rules

ASX published the proposed changes to the listing rules on 2 November 2016 aimed at maintaining market integrity whilst not stifling innovation.

General requirements

The changes to the general listing requirements for all entities include:

  • 20% free float requirement (effective immediately) - New requirement for 20% of the main class of securities that are not restricted securities or subject to voluntary escrow to be held by non-affiliated security holders;
  • Simplified minimum spread requirements - simplified single tier requirement of a minimum of 300 non-affiliated security holders, each holding at least $2,000 in non-restricted securities; and
  • Financial statement disclosure - New requirement for market disclosure of two full financial years of audited accounts for the entity seeking admission. This will include the disclosure of the audited accounts of any significant entity or business that has been acquired in the 12 months prior to applying for admission or in connection with the listing.

Asset test admission requirements

The changes applicable to entities applying for admission under the assets test include:

  • Net tangible asset test requirements have increase the minimum required net tangible assets from $3 million to $4 million;
  • Market capitalisation test requirements have increased the minimum required market capitalisation from $10 million to $15 million; and
  • Working capital requirements have been standardised for all entities applying under the asset test. All entities listing under the assets test will need to have $1.5 million in working capital after consideration of the first year’s budgeted administrative costs and capital expenditures.

Profit test admission requirements

The changes applicable to entities applying for admission under the profit test are limited to:

  • An increase of the minimum consolidated profits for the 12 months prior to admission from $400,000 to $500,000.