Understand and navigate the new ASX changes

Business Insights

A consultation paper was issued on 12 May 2016 by the ASX providing details of the changes in admission requirements for those entities applying to be listed. ASX are proposing these changes to ensure the ASX market remains competitive internationally, is a market of quality and integrity, as well as to simplify and improve the drafting of the admission rules.

The potential changes ahead

The proposed ASX changes are likely to be implemented on 19 December 2016 and include:

  • Increasing the financial thresholds to increase the profit requirement to at least $500,000 for the previous 12 months and increasing the NTA threshold to at least $5 million, or a market capitalisation of $20 million;
  • Introducing a 20% minimum free float requirement at the time of admission;
  • Changing the spread test, so that at least 200 security holders are required for a float less than $50 million or 100 security holders for a float that is more than $50 million, whilst also ensuring each shareholder has at least $5,000 of securities;
  • Standardising the working capital requirements so that all companies have a $1.5 million minimum working capital requirement;
  • Requiring all entities to have audited accounts for three full financial years, which are no more than eight months old;
  • Reinforcing ASX’s discretion to refuse admission to the official list; and
  • Changes to ASX Foreign Exempt Listings, such that overseas entities must have a minimum NTA of $2,000 million or a minimum market capitalisation of $2,000 million.

Is your company planning an IPO or do you have a question? RSM is a leading adviser for companies working towards listing on the ASX.  Get in touch with our team to find out more.