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ASX finalises continuous disclosure guidance

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13 Mar 2013

The Australian Securities Exchange (ASX) has released updated guidance to assist Australian listed entities to comply with their continuous disclosure obligations. The new guidance follows a public consultation process and was developed in consultation with the Australian Securities and Investments Commission (ASIC).

Under the ASX Listing Rules, an entity must immediately tell the ASX if it is, or becomes, aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. This requirement extends to relevant financial information. These requirements are also reinforced in the Australian Corporations Act 2001.

In responding to feedback from the consultation process, the finalised guidance provides further clarification on such topics as:

  • what the ASX means by the word “delay” when it defines “immediately” as “promptly and without delay” under the ASX Listing Rules obligation
  • when an entity should ask for a trading halt to manage its continuous disclosure obligations
  • the disclosure of earnings surprises, including the role played by consensus estimates in setting market expectations for earnings
  • expectations around the monitoring of social media.

In relation to disclosure obligations around earnings, the revised guidance discusses several areas:

  • General guidance around earnings guidance, including the expectation that it should have a reasonable basis on fact and be approved by the board of directors
  • When information in communications with security holders, analysts could be construed as 'de facto earnings guidance'
  • The nature of 'earnings surprises', focusing on situations where an entity becomes aware that its earnings for the current reporting period will differ materially (downwards or upwards) from market expectations, providing extensive guidance on when and how disclosure should be made.

The guidance is contained in the following documents:

  • Guidance Note 8: Continuous Disclosure: Listing R les 3.1 – 3.1B
  • Continuous Disclosure: An Abridged Guide
  • A package of disclosure-related amendments to the ASX Listing Rules.

The ASX has also released a consultation response document arising from the review, and also updated a number of other guidance notes.

The new guidance is expected to become effective from 1 May 2013.

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