Revised ASX Guidance Note 12

    View Authors November 2014

    On 30 September 2014, the Australian Securities Exchange (ASX) released an updated ASX Guidance Note 12 - Significant Changes to Activities (GN12).

    GN12 details (among other things) the circumstances in which ASX will exercise its discretion, under ASX Listing Rule 11.1.3, to require an entity to re-comply with Chapters 1 and 2 of the ASX Listing Rules (as if the entity was applying for admission to the official list of ASX) as a result of undertaking a transaction that results in a significant change the “nature” or “scale” of the entity’s activities.

    ASX has stated in the new GN12 that it will now consider requests from listed entities undertaking a capital raising in conjunction with a re-compliance listing, to not apply the “20 cent rule”, allowing the issue price under the capital raising to be less than 20 cents per security (so long as the issue price is still no less than 2 cents per security). This will be particularly useful for small cap entities, seeking to undertake back door listings, that are trading at a share price which is materially less than 20 cents per share.