Helpful tips for Listing around australia
Helpful tips for Listing around australia
FOREWORD BY AUSTRALIAN SECURITIES EXCHANGE –
As at 30 June 2014, the aggregate market capitalisation from the Australian Securities Exchange (“ASX”) involved AUD$1.5 trillion. 1,948 domestic companies taken into account AUD$1.35 trillion capitalisation and 101 overseas companies with primary, secondary or exempt foreign listing status taken into account AUD$1.49 billion.
An ASX listing offers significant advantages, included in this:
? Capital pricing is decreased through accessibility large pool of capital that surrounds the ASX.
? Existing proprietors and new investors alike gain liquidity for his or her investments.
? A variety of possibilities for worker incentive schemes along with other benefits become available.
While the advantages of an ASX listing are obvious, the entire process of becoming listed may seem daunting. Because this helpful publication from DLA Piper explains, a lot of jobs are involved with becoming listed. However, the processes are obvious and transparent. Using experienced advisors, a properly informed decision can be created on whether so when to list out, along with a viable and practical plan ready for the work. ASX works carefully with companies seeking listing as well as their advisors to make sure that any potential difficulties are identified and resolved as soon as possible. We urge companies to get hold of us as soon as practically possible.
With a decent plan, helpful advice and careful coordination, appropriate companies should acquire a effective listing having a minimum of fuss.
Please visit full Guide below to learn more.
04 | Listing in Australia
THE DECISION TO LIST
The first step for a company considering listing on ASX is to weigh up the key advantages and potential disadvantages that such a
move may provide (see below) and to choose a path that best achieves the company’s broader objectives.
IS AN IPO RIGHT FOR YOUR COmPANY?
It substantially improves the company’s capital raising ability to
fund future growth and acquisitions and pay down debt.
It can facilitate an exit for early stage or private equity investors.
Equity incentive schemes can be more attractive to incentivise
management and employees.
The market develops a greater awareness of the company and
its products or services.
The company’s shares may be more attractive when offered as
consideration for the acquisition of other assets.
The company’s securities may be more attractive as collateral
The ASX Listing Rules encourage the implementation of good
corporate governance practices, if they are not already in
existence, and help to improve existing practices.
The company and its business and products may enjoy enhanced
There is greater liquidity in the company’s shares and there is no
stamp duty on share transfers.
A listing may attract institutional investment in the company as a
result of increased liquidity and transparency.
The previous owners necessarily give up some control – the
extent depends on the size of the public offering.
A loss of privacy caused by media interest and compliance with
the regulatory regimes.
Restrictions on the freedom of the owners to deal with the
company and its assets without shareholder approval.
Complying with the ASX Listing Rules involves costs including
initial fees, annual listing fees, and increased costs of convening
There is greater accountability to institutional and retail
Directors need to fully disclose their interests in the company
on a continuous basis.
The price and liquidity of the company’s shares may be affected
by market conditions as a whole no matter how well the
business is run.
The company will be subject to much greater disclosure and
reporting requirements both during the IPO and subsequently as
a listed company.
A large amount of management time may be diverted from the
main job of running the business during the IPO process.
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ELIGIBILITY TO LIST
The ASX Listing Rules set the minimum admission criteria which a company must meet in order to obtain a listing on ASX. Some of
the key criteria are summarised below:
ADmISSION CRITERIA GENERAL REqUIREmENT
NUmBER OF SHAREHOLDERS Minimum 400 investors @ A$2,000 or
Minimum 350 investors @ A$2,000 and 25% held by unrelated parties
Minimum 300 investors @ A$2,000 and 50% held by unrelated parties
COmPANY SIzE Profit test A$1 million aggregated profit over past 3 years and
A$400,000 consolidated profit over last 12 months
Assets test A$3 million net tangible assets after deducting costs of fundraising
A$10 million market capitalisation
CAN A FOREIGN COmPANY LIST ON ASX?
ASX is the fifth largest equity market in the world and has an
international reputation for conducting markets of integrity. This
provides the investor confidence which is required for active
securities trading. Foreign companies can seek either a primary
or dual listing on ASX in order to access the Australian capital
market and create a new market for the company’s shares.
There are two forms of listing available to foreign companies:
1. A foreign exempt listing – only available for large companies
with a primary listing on another stock exchange and meeting
one of the following criteria:
• Operating profit before tax for each of the last three
financial years of at least A$200 million; or
• Net tangible assets of at least A$2 billion.
2. A full ASX listing – any foreign company can seek a full
ASX listing provided that it meets ASX’s admission criteria
including the financial thresholds and shareholder spread
Whilst companies with a foreign exempt listing are only subject
to minimal requirements under the ASX Listing Rules, any
foreign company with a full ASX listing will be subject to all of the
ASX Listing Rules and related disclosure obligations except to
the extent that ASX has waived the application of a particular
Listing Rule. ASX will waive the requirement to comply with
a particular Listing Rule in certain circumstances where it is
confident that the rules of another stock exchange which apply
to the company are at least as stringent as ASX requirements.
As the trading of shares of foreign companies can generally not
be settled through ASX’s electronic trading system, CHESS,
the shares are instead traded in the form of depositary receipts
known as CHESS Depositary Interests or CDIs.
06 | Listing in Australia
PREPARING FOR LISTING
THE IPO TEAm
It is very important for a company which intends to go public to engage advisers who are familiar with IPOs and listing. First, these
advisers will help the company assess whether or not it is suitable for listing. Then, if it is, they ensure a smooth transition to the
public arena. Meeting with professional advisers at an early stage is the most effective way to identify the issues and minimise costs.
The following advisers commonly feature on an IPO team:
The investment bank or stockbroker is primarily responsible for
managing the IPO process and coordinating the company’s other
advisers. Its role may include advising on the structuring of the offer
including the size of the issue, timing and pricing of the offer, and
advising on and conducting marketing of the offer including running
roadshows with the company.
The investment bank will also be responsible for managing the offer
so as to ensure that the fundraising will be successful (including
achieving the required shareholder spread as set out on page 5)
and, if underwritten, to guarantee that the underwriter will acquire,
or place, any shares not taken up by the public. We strongly advise
companies against proceeding beyond the initial planning stage
without a clear indication of support from an investment bank/
sponsoring broker. Obtaining that support is probably the most
important initial step in going public.
DLA Piper advises companies on all legal aspects of preparing for
listing including matters such as converting to a public company,
implementing any required pre-IPO reorganisation, appointing
and removing directors, changing the company’s constitution
and directors’ service contracts, tax related issues and preparing
corporate governance policies. We also coordinate the due
diligence process and conduct the legal aspects of due diligence,
assist the company in the preparation and verification of the
prospectus and advise on underwriting or offer management
The role of the independent accountant is to conduct financial due
diligence and to provide a report (for inclusion in the prospectus)
on any historical and forecast financial information in the
The company will also need to appoint tax advisers (note, this
role can often be fulfilled by the legal team or an independent
accountant), and may require experts to report on specific matters
eg. Independant Geologist for resources companies, Patent-
Attorney for biotech companies. PR consultants may also assist in
managing the media and shareholder communications in connection
with the IPO.
It is important that the company has a clear idea of where it is
heading. It should have a business plan setting out its strategic
objectives and course of action over the next three to five years.
The listing should fit within a broader direction and growth strategy
for the company that is reflected in the business plan. Having a
sound business plan documented and in place will also assist in
preparing the prospectus and, ultimately, in securing investor
08 | Listing in Australia
directors are of good fame and character. Companies seeking to list
are required to provide ASX with national criminal history checks
and bankruptcy checks for each director, along with statutory
declarations from each director affirming that they have not been
the subject of disciplinary or enforcement actions by an exchange
In addition, formal corporate governance policies and committees
should be established (an illustration of which is given in the diagram
Note that at the time of publication of this guide, changes to ASX’s
corporate governance guidelines are currently under consultation
and companies considering a new listing may need to take into
account the updated guidelines upon conducting an IPO.
PUBLIC COmPANY STATUS
The company will need to be converted to a public company (if that
is not already the case) and an ASX compliant constitution will need
to be adopted.
The company will need to consider how the offer of shares on
its IPO should be structured. The structure will depend on the
company’s ultimate aims. For example, does the company need to
raise a specific amount of capital from the offer or are any existing
shareholders looking to exit the investment?
An IPO can be structured:
• As an offer for subscription ie, an offer of new securities of the
• As an offer for sale ie, an offer of existing securities of selling
shareholders (allowing existing shareholders to exit all or part of
A company can also conduct a compliance listing, which comprises
a listing without an offer of securities. This may occur, for example,
where a company is seeking a dual listing on ASX to access
the Australian market but where the company has sufficient
shareholder spread and does not currently need to raise new
GROUP AND CAPITAL STRUCTURING
During the planning stage, the IPO team should carefully consider
whether or not the company’s existing corporate, capital and
reporting structures are appropriate for a publicly listed company.
Some of the matters that need to be considered are:
• The company’s capital structure – should shares be consolidated
or split to achieve a suitable initial issue price?
• Is the corporate structure satisfactory – should a new holding
company be put in place to be the IPO vehicle?
• Are the company’s statutory records up-to-date? Have all
directors’ and members’ meetings been fully minuted?
• Are all material contracts properly executed?
• Is the company’s main asset or undertaking appropriately
protected – should registrations be updated, insurances obtained
and/or security interests be removed or amended?
• Are any transactions with the present owners of the company
fully documented and on arm’s length terms?
• Are there any special arrangements with shareholders which may
need to be unwound?
• Is an employee incentive scheme to be introduced?
• Does the company have adequate financial reporting and
information systems to provide timely and reliable information to
investors? The system will also need to be able to report reliable
information under the ASX continuous disclosure requirements.
There is no working capital requirement if a company is seeking
admission under the profit test (see page 5 – Eligibility to list).
However, if the company is seeking admission under the assets test:
• The company must have at least A$1.5 million of working capital;
• If it does not have this amount, then the working capital must be
at least A$1.5 million if the company’s budgeted revenue for the
first full financial year that ends after the listing was included in
The prospectus for the offer must also include a statement that
the company has sufficient working capital to carry out its stated
THE BOARD AND CORPORATE GOvERNANCE
Does the board have sufficiently experienced directors? It may be
appropriate to appoint additional directors to add independant
oversight, further financial, operational and general business
experience, and to make the company more attractive to potential
It is a condition to listing that ASX must be satisfied that the
disclosure policy Share trading
Code of conduct
Audit & Risk
Board of Directors
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THE DUE DILIGENCE PROCESS
The company will need to undertake a formal due diligence
process prior to the IPO. The diligence process is critical to
ensuring that the prospectus:
• Contains the information required by the Corporations Act
2001 (Cth) (Corporations Act).
• Does not contain a false, misleading or deceptive statement
or omit material information.
• Continues to comply with the Corporations Act once lodged
Ultimately, the process is intended to minimise and provide
a defence against the potential liability which may arise under
Australian law for all those involved in the preparation of the
ESTABLISHING A DUE DILIGENCE COmmITTEE
A due diligence committee (DDC) will be established to manage
and coordinate the due diligence process with a view to ensuring
that the above objectives are met. The DDC will usually
comprise representatives from the board and management of
the company, its lawyers and tax advisers, the investment bank/
stockbroker or underwriter of the IPO and the independent
accountant. The DDC will hold regular formal meetings
throughout the IPO process to ensure that the due diligence
program is properly implemented.
ROLE OF THE DUE DILIGENCE COmmITTEE
The role of the DDC is to define the nature and scope of the
due diligence process, ensure that appropriate enquiries are
made, review reports on those enquiries and determine which
matters arising during the course of the due diligence process
need to be disclosed in the prospectus. The due diligence
process is usually documented in a due diligence planning
Each member of the DDC will be required to undertake
enquiries relating to their area of expertise and to draw to
the attention of the DDC any matter which is ‘material’. The
DDC then needs to make that call on whether the matter is
sufficiently material to require disclosure in the prospectus.
FINAL REPORT TO THE COmPANY
Following completion of the due diligence process, a sign-off
will be required to be provided to the DDC by each member of
the DDC in respect of their area of expertise. Once all relevant
sign-offs have been obtained and adequate verification of the
prospectus has been undertaken, the DDC will then provide
a final report to the board of the company which effectively
informs the directors that the due diligence investigations
undertaken have shown that the prospectus meets the
requirements of the Corporations Act.
CONTINUING DUE DILIGENCE
Following lodgement of the prospectus with ASIC, the due
diligence process should continue to ensure that the DDC
is made aware of any material new circumstances which may
impact on the accuracy of the information in the prospectus
and consequently to enable the board to determine whether a
supplementary or replacement prospectus needs to be issued
(see section 4 for further details).
10 | Listing in Australia
11 | Listing in Australia
A company will ordinarily be required to prepare a prospectus
under which it will offer shares to the public on its IPO.
However, in certain circumstances, such as a dual listing where
the company is not looking to raise capital at the time of
the listing, ASX will instead permit the company to prepare
an information memorandum, which can have slightly lower
disclosure requirements and does not attract the statutory
prospectus liability regime.
WHAT TO INCLUDE IN A PROSPECTUS
The Corporations Act does not set out in detail all matters
that should be included in a prospectus. However, Section 710
provides that a prospectus must contain all information that
investors (and their professional advisers) would reasonably
require, and reasonably expect to find in the prospectus, to
make an informed assessment of material matters relating to the
• The assets and liabilities, financial position, profits and losses
and prospects of the company.
• The rights attaching to the securities being offered.
There is also certain prescribed information which must be included
in a prospectus such as the terms and conditions of the offer,
disclosure of certain payments made to directors and advisers in
connection with the IPO and the expiry date for the prospectus.
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A sample contents page of a prospectus is set out below1:
1. Investment overview
Overview of the company, its business operations and
2. Industry overview
Overview of the industry in which the Company
3. Our business
Description of the Company’s business and business
4. Financial information
The past financial performance and pro-forma
financial information of the Company as prepared by
5. Risk factors
The main risk factors which apply to the Company’s
business operations and an investment in the
6. Board, management and corporate governance
Overview of who will manage the Company and the
Company’s approach to corporate governance
7. Details of the Offer
Structure of the Offer and how to apply for securities
under the Offer
8. Independent Accountant’s Report
Independent Accountant’s Report on the historical
financial performance of the Company
9. Additional information
Additional information about the Company, its
securities and the interests of various parties such as
Directors and professional advisers
Definitions of words, terms and abbreviations which
are used in this Prospectus
1Note: depending on the nature of the business there may be a
requirement for additional expert reports (eg. a mining entity would need
a JORC Report, a biotech company may need an Intellectual Property
In addition to containing the prescribed content, the
Corporations Act also requires that a prospectus must
be presented in a ‘clear, concise and effective’ manner so
that investors (including, in particular, retail investors) can
understand the potential opportunities and risks associated with
an investment in the company’s shares.
ASIC has released a regulatory guide regarding its expectations
for the content of prospectuses and compliance with Section
710 and the other requirements of the Corporations Act
including the ‘clear, concise and effective’ requirement. The
guide sets out ASIC’s view of what information investors expect
to see in a prospectus and requires that prospectuses include
an effective overview section to highlight key information at the
beginning of the prospectus.
The investment bank/stockbroker and the company’s lawyers
usually assist with drafting of the prospectus with input from the
company’s management and its other advisers. The prospectus will
contain an Independant Accountant’s Report on the company’s
financials and may also include reports from other experts such as a
tenement report for mining or exploration companies.
ASIC and ASX do not review prospectuses prior to lodgement
and launch of the offer. Accordingly, the onus is on directors,
underwriters and others concerned with the issue of the
prospectus to ensure that it complies with the requirements
of the Corporations Act. Substantial penalties can apply in the
event that the prospectus contains misleading information or
omits material information.
As a result, in addition to the due diligence exercise which is
undertaken alongside the prospectus drafting (see section 3),
once the prospectus is in a substantially final form a verification
exercise is performed to ensure the accuracy of the prospectus’
contents. This process is ordinarily coordinated by the lawyers
and involves each material statement in the prospectus being
referenced back to a verifying source document to check its
accuracy. Where there are statements of opinion, forecasts or
expectations on, for example, future performance, growth or
development of the business, the verification process will need
to investigate the reasonableness of the assumptions upon which
these views are based.
SUPPLEmENTARY OR REPLACEmENT
If new information comes to light after lodgement of the prospectus
with ASIC which may result in the information provided in the
prospectus being misleading or a new circumstance arises which
would have been required to be disclosed if it had been in existence
at the date of the prospectus, this will need to be disclosed by
way of a supplementary or replacement prospectus if the new
information is materially adverse from the point of view of
12 | Listing in Australia
THE POTENTIAL LIABILITIES FOR DIRECTORS
There are usually two ways in which a person may be subject to
civil and criminal liability under the Corporations Act in relation
to an IPO. The first is if the prospectus contains a misleading or
deceptive statement or omits information which is required to
be included under the Corporations Act. The second is if, after
the prospectus was lodged, a new circumstance has arisen which
would have been required to be disclosed in the prospectus if it
had arisen before the prospectus was lodged, and an amended
supplementary or replacement prospectus has not been issued
(see section 4).
In addition, the company, its directors or a person responsible
for statements in the prospectus may be liable at common
law for a fraudulent or negligent misrepresentation in the
WHO mAY BE EXPOSED TO LIABILITY?
A number of parties involved in the IPO process may be
subject to criminal and civil liability including (amongst others)
the offeror of securities (being the company and/or any selling
shareholder), directors and proposed directors, underwriters
and certain other persons who are involved in the contravention
of the Corporations Act.
EXTENT OF LIABILITY
A person who contravenes or is involved in a contravention of
the Corporations Act may be subject to both criminal and civil
liability. The extent of the potential liability will differ depending
on the person involved. In particular, in the event that the
prospectus is defective the company, any selling shareholder,
their respective directors and any underwriter will bear
responsibility for the entire prospectus and will potentially be
liable for any loss or damage suffered.
POTENTIAL LIABILITY FOR OTHER ACTIONS
UNDERTAkEN IN CONNECTION WITH THE IPO
In addition to the specific prospectus liability referred to above,
liability may also arise for other actions taken or statements
made in connection with an IPO. For example, a person
could potentially contravene the Corporations Act by making
a misleading or deceptive statement during a roadshow to
promote the IPO or by making a statement which breaches
the pre-prospectus advertising restrictions (see section 7).
Accordingly, directors and management should be very careful
about any statements they make about the company or the offer
during the IPO process.
There are a range of defences available to potential civil and
criminal liability, some of which include:
• The ‘due diligence defence’, that is, that the person has made
all enquiries which were reasonable in the circumstances and
having made these enquiries, they believed on reasonable
grounds that a statement was not misleading or deceptive or
that there was not a material omission from the prospectus.
• Where a new circumstance has arisen and it can be
established that the person was not aware of the new matter.
• Establishing that the person reasonably relied on information
provided by someone outside the company, such as a
professional adviser, for statements contained in the
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THE ROLE OF ASIC AND ASX
ASIC regulates the offer of securities by companies in Australia
and certain associated matters such as insider trading, market
misconduct and pre-prospectus advertising (see section 7).
As noted above, ASIC does not pre-vet prospectuses before
lodgement, therefore the onus falls on the company and its
advisers to ensure that the prospectus meets the requirements
of the Corporations Act. However, ASIC does review
prospectuses after they are registered.
Companies are prohibited from accepting applications for shares
under an IPO until the expiry of a seven day ‘exposure’ period
(Exposure Period) during which time market participants and
ASIC have an opportunity to scrutinise the prospectus.
If ASIC considers that the prospectus is defective eg, if it
contains a misleading statement or omits material information,
it can issue a stop order to prevent the company from offering,
issuing or selling shares under the prospectus while the order
is in force. ASIC may also require the company to issue a
supplementary prospectus or replacement prospectus to
address the deficiency in the original document.
ASX Limited regulates the admission of companies to trading on
the ASX and governs the conduct of listed companies.
We recommend that a company has an initial discussion with
ASX fairly early in the IPO process to ensure that any issues are
identified and resolved at an early stage. Matters which may be
discussed, for example, are:
• the extent to which ASX will impose restrictions on the sale
of any shares post-IPO – Trading in some proportion of the
shares held by certain shareholders is likely to be subject
to restrictions on sale for a period of up to two years if the
company is admitted under the assets test (see section 1); and
• the availability of waivers from some of the ASX Listing
Rules – For example, in certain circumstances, where a
company is dual listed, some requirements of a company’s
home jurisdiction may be inconsistent with the Listing Rules
and therefore modified rules may be applied in limited
circumstances to take account of this inconsistency.
Application for admission
The formal application to ASX for admission to its official list
is required to be made within seven days of lodgement of the
prospectus with ASIC.
Once listed, the company is required to comply with the ASX
Listing Rules which prescribe certain reporting obligations and
shareholder approval requirements as further described in
14 | Listing in Australia
15 | Listing in Australia
mARkETING THE OFFER
Prior to and during the offer period, the company will wish
to market the offer to ensure that there is a good take up of
its shares and that the best possible listing price is obtained.
However, the Corporations Act imposes strict restrictions
on advertising an IPO before the prospectus is lodged with
ASIC. This is intended to protect, in particular, retail investors
by ensuring that they only acquire securities on the basis
of the information contained in full prospectus. However,
certain marketing activities can be undertaken to institutional
(sophisticated or professional) investors including IPO
roadshows, which are a series of meetings between the company
and other investment bankers and institutional investors to
generate interest for the IPO.
PRICING THE OFFER
The investment bank or stockbroker managing the offer will
provide advice on the appropriate pricing structure. Bookbuilds
are commonly used, especially on medium to large-size floats,
primarily to maximise the issue price in light of the proposed
size of the offer. A bookbuild is essentially a process by which
an investment bank will build a book of demand for shares in
the IPO company. Investors submit bids to the bank specifying
the price at which they would acquire shares and when the
book has closed, the investment bank will evaluate the collected
bids and set the final issue price. Bookbuilds can either be used
at the beginning of the offer period (sometimes before lodging
the prospectus with ASIC) to determine a fixed price, which
will then be specified in the prospectus, or a price range can be
specified in the prospectus, with the final price determined by
way of an institutional bookbuild at the end of the offer period.
An IPO can comprise offers to different types of investors
(whether under an offer for subscription or sale), including one
or more of the following:
Institutional offer: an offer to invited
sophisticated or professional investors
Retail offer: an offer to the public generally
Broker firm offer: an offer to certain clients of
brokers granted allocations of shares
Priority offer: an offer available to certain persons
on a priority basis (for example, to employees
or holders of shares in a related company)
Following lodgement of the prospectus with ASIC and expiry
of the Exposure Period (see section 6), the offer will open and
applications can be accepted by the company.
PROCEEDS OF ISSUE
All funds raised by the offer must be held in a separate trust
account. The company may not use them until the shares have
been issued and allotted.
ALLOTmENT AND COmmENCEmENT OF
Once the offer is closed, the company will decide, in conjunction
with the investment bank managing the process, on the
allocation of shares and then, once allotted, trading in the
shares on ASX can commence once all of ASX’s conditions to
quotation are satisfied.
16 | Listing in Australia
CONTINUING OBLIGATIONS FOR
GENERAL CONTINUING OBLIGATIONS
Following completion of the IPO process, once trading of the company’s shares commences, the new listed company will need to
comply with the detailed continuing obligations in the ASX Listing Rules. Some of the key obligations are described below:
Each listed company must notify ASX immediately of any information concerning it that a
reasonable person would expect to have a material effect on the price or value of its securities.
Exceptions to this rule apply for example for information relating to confidential negotiations on
an incomplete proposal and for information produced for internal management purposes (such as
financial projections). In addition, there are specific disclosure requirements for matters such as
changes to directors’ interests, share issues etc.
ASX requires listed companies to publish prescribed financial reports on an annual, half-yearly
and, in some cases, quarterly basis.
Listed companies are generally limited to issuing new shares equal to no more than 15% of their
issued share capital over a rolling 12 month period, unless shareholder approval is obtained or
one of a number of specified exceptions apply. Small and mid-cap companies may issue additional
shares equal to a further 10% of their issued share capital, subject to meeting certain conditions.
The ASX Listing Rules prescribe shareholder approval requirements for certain transactions
between a company and its directors and other related parties.
Shareholder approval requirements are prescribed for certain major acquisitions and disposals.
ASX publishes best practice recommendations for the corporate governance of listed companies.
There are only a small number of binding corporate governance requirements with the majority
of these guidelines are not mandatory. Instead, ASX applies an ‘if not, why not’ approach,
requiring companies to explain in their annual report why they have not complied with any of the
best practice recommendations.
SPECIAL REqUIREmENTS FOR FOREIGN
COmPANIES LISTED ON ASX
Generally, unless they have a foreign exempt listing, overseas
companies are required to comply with the same continuing
obligations as Australian companies. However, in certain
circumstances, ASX will impose additional disclosure
requirements, or may waive certain Listing Rules, for foreign
companies. For example:
• As the Australian takeover and substantial shareholder
provisions do not apply to companies incorporated outside
Australia, ASX requires a statement of that fact to be included
in each annual report and requires an undertaking from the
company to immediately inform the market on becoming
aware of any person becoming or ceasing to be a ‘substantial
shareholder’ (as defined in the Corporations Act) or a
movement of at least 1% in the number of securities in which
a ‘substantial shareholder’ has an interest.
• ASX may permit foreign companies to report in the
currency of their home jurisdiction and under the recognised
accounting policies of that jurisdiction and will in certain
circumstances waive its financial reporting requirements
where it considers that the equivalent requirements of the
company’s primary exchange are sufficiently stringent to keep
the market informed.
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18 | Listing in Australia
In order to maximise their chances of a successful listing, companies are encouraged to take the following steps in advance of the IPO:
Consider whether an IPO is the right option for the company and, if so, whether ASX is the most appropriate stock
Start preparations early and view an IPO as a continuing process, not a one-off financial event – lack of planning can diminish
the company’s chances of obtaining an optimal valuation on listing.
Develop a good business plan and credible investment story showing a clear and achievable plan for growth in the medium
term which will form the basis for the prospectus. Ensure that the company is in a position of competitive strength when
compared to its peers.
Appoint an experienced IPO team early in the process including investment bankers/underwriters, lawyers, accountants and
a share registry who can lead the company through the process efficiently and minimise disruption to the business during the
Start acting as a public company before listing, for example:
• Ensure robust financial, operating and information systems are in place.
• Put in place corporate governance arrangements appropriate for a listed company.
• Ensure that you have quality management leading the company including in particular the CEO and CFO who will be the
key focus of institutional investors during the IPO roadshows.
• Ensure that you have appropriate expertise and independence on the board of directors.
• Appoint an investor relations consultant to ensure that the right messages are reaching the market both before and after
Consider whether appropriate incentive plans are in place for executives and employees to ensure that they are
appropriately incentivised to grow the business after listing.
Be realistic – it is important to understand the amount of time and work involved in preparing for an IPO to obtain the real
benefits of a listing.
kEY FACTORS IN ENSURING A
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20 | Listing in Australia
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