ASX Listings and Compliance

Most Australian public companies have their shares listed on the Australian Stock Exchange Limited ("ASX"). Listing with the ASX provides fluid trading in the company's shares in the market.

Listing

To have a company's shares listed on the ASX, the company has to meet the requirements of ASX. These requirements are also known as ASX Listing Rules ("the listing rules"). The listing rules cover amongst other things:

Admission to the ASX
Having the company's shares quoted on the ASX
Continuous and periodic disclosure by the company of vital information
Reporting of all significant transactions of the company
On-going requirements to maintain the listing
Circumstances of trading halts, suspension and removal from the ASX

The listing rules provide a standardized or level playing field for not only the companies listed on the ASX but also other participants in the market such as, the brokers, investors, officers of the company, clearing house and regulators.

The ASX also has a supervisory role pursuant to the contractual relationship between it and the company in the way the company's shares is listed and information is disseminated by the company to the market.

The standard expected by ASX and by the other participants in the market of the company depends upon the extent to which ASX enforces compliance with its listing rules.

Compliance

The listing rules in effect are contractually binding on the company as the company had agreed to the rules prior to or at the time of application for admission to the ASX.

The rules are also enforceable pursuant to the Corporations Act 2001 (Cth) ("the Act"). The Act empowers the Court to order a company to comply with the rules or enforce the rules against the company listed on the ASX.

Hence, apart from halting or suspend any trading activity of the company's shares on the ASX or removing the company from the ASX under the contractual arrangement with the company, the ASX is also able to seek orders from the Court to enforce the listing rules.

Anybody else who is aggrieved by the company's behaviour in not adhering to the listing rules may also apply to the Court for orders under the Act. They may include an investor, an officer of the company, a broker, a clearance house and the Australian Securities & Investments Commission ("ASIC").

The failure to adhere to a Court order may result in orders for compensation by the company, contempt of Court by the company and its responsible officers and also criminal charges being laid against those officers.

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