Securities trading policies mandatory under new ASX Listing Rules
5 November 2010
The time has come for Australian Securities Exchange (ASX) listed entities to review their existing securities trading policies regarding key management personnel and ensure compliance with new ASX Listing Rules that come to effect on 1 January 2011.
Allens Arthur Robinson (Allens) Partner Warwick Painter said that ASX-listed entities that did not currently have a securities trading policy for officers and management must ensure one is prepared and lodged with ASX by that time. ASX-listed entities which already have a trading policy will need to review and lodge the trading policy with ASX.
Mr Painter said the new Listing Rules replace previous ASX Corporate Governance Council Recommendations whereby published securities trading policies are recommended but not mandatory. As of the new year, all ASX-listed entities must disclose the full terms of their securities trading policy for key management personnel.
'The securities trading policy will need to satisfy the minimum requirements set out in the new Listing Rules,' Mr Painter said.
'Every Change of Director's Interest Notice form filed with ASX will be required to specify whether the acquisition or disposal of securities occurred during a closed period under the trading policy and, if so, whether written clearance was obtained in accordance with the trading policy.'
According to Mr Painter, the ASX has not adopted a 'one-size-fits-all' approach. Instead, it is up to each listed entity to determine the details of its trading policy.
'However, the new Listing Rules require that a trading policy specifies – as a minimum – the closed periods when restrictions on trading apply to key management personnel; the mechanism for obtaining clearance to trade; and other 'prohibited periods' when trading blackouts may be imposed,' Mr Painter said.
He warned entities against assuming that existing trading policies automatically comply with the new Listing Rules and advised all ASX-listed entities to review their trading policy and confirm compliance with the new rules ahead of the 1 January deadline.
'We expect that the new Listing Rules will standardise disclosure of company trading policies, which will enable a better comparison of practices between listed entities,' he said.
'However, the new Rules (including the requirement to identify directors trading during closed periods) may bring the content of such policies into sharp focus.'
- Susan CowenCorporate Affairs Adviser,
Ph: +61 3 9613 8374
Notes for editors..
Allens Arthur Robinson has staff in 14 cities and eight countries across the Asia Pacific.