ASX changes to help clear up rules on disclosure
It comes after several large listed companies - including David Jones, Billabong and Spotless - were last year the subject of approaches from private equity players with highly conditional offers that were announced to the market uncertainly.
Kevin Lewis, ASX chief compliance officer, said the ASX's rule changes - which come into effect on May 1 - are meant to provide clarity as to when companies should disclose information, and what type of information that should be.
"One of the most important changes is around the meaning of the word 'delay' when we talk about something happening promptly and without delay," Mr Lewis said.
"There was quite a bit of concern around those notorious ASIC infringement notices that involved delays of 60 and 90 minutes ... [but] we interpret 'delay' as meaning a deliberate postponement." Mr Lewis said the rule changes were also meant to clarify how the ASX treats media and analyst reports - and any market rumours - as evidence of a loss of "confidentiality".
ASX's review of continuous disclosure rules had to be put on hold last year when the corporate regulator alleged that Fortescue Metals - and billionaire Andrew Forrest - had contravened the Corporations Act.
The alleged contraventions were in connection with public statements about agreements Fortescue had made with Chinese state-owned entities to finance and build parts of the miner's proposed Pilbara iron ore mine in Western Australia, but the High Court found in the miner's favour. The final guidance also comes after retailer David Jones last year received an unsolicited takeover bid from the mysterious EB Private Equity.
News of the offer sent the retailer's share price rising almost 20 per cent higher when David Jones informed the market.
But Mr Lewis said that event had been factored in to the consultation draft, and it did not change the final draft.
The ASX rule changes are also meant to clarify how the ASX treats the disclosure of earnings surprises, including the role played by consensus estimates in setting market expectations of earnings.
They also clarifies the ASX's expectations around the monitoring of social media by companies.
Frequently Asked Questions about this Article…
The ASX has overhauled continuous disclosure rules to clarify when companies must tell the market about material information and what counts as that information. The final changes — intended to reduce confusion after several conditional private equity approaches — come into effect on May 1.
The ASX says "delay" should be read as a deliberate postponement of disclosure rather than brief timing gaps. This clarification responds to concerns about short 60–90 minute delays cited in infringement notices and aims to make expectations clearer for companies and investors.
The rule changes clarify that media and analyst reports — and credible market rumours — can be treated as evidence that confidentiality has been lost. If confidentiality is lost, companies may be expected to promptly disclose the information to the market.
The changes are designed to give clearer guidance on when companies should disclose takeover approaches or unsolicited offers. The review considered recent cases such as the unsolicited EB Private Equity bid for David Jones (which drove its share price up nearly 20%) and factored such events into the final guidance.
The final guidance clarifies how the ASX treats earnings surprises and the role that consensus analyst estimates play in shaping market expectations of earnings. That means companies should be aware of how market forecasts might influence whether an earnings outcome needs announcement.
Yes. The rule changes clarify the ASX's expectations around companies monitoring social media. If material information appears on social platforms and confidentiality is effectively lost, companies may need to make a market disclosure.
The review was paused after the corporate regulator (ASIC) alleged Fortescue Metals and Andrew Forrest had contravened the Corporations Act over public statements about agreements with Chinese entities. The High Court later found in Fortescue's favour; the ASX resumed and finalised its guidance after that episode.
Investors should pay closer attention to company market announcements, media and analyst commentary, and social media posts that could indicate a loss of confidentiality. Also watch how companies report earnings relative to consensus estimates and any announcements about takeover approaches, since those areas are specifically clarified by the new ASX rules.
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