Recent rule amendments

On 12 March 2021, ASX released an updated version of Guidance Note 19 Performance Securities (“GN 19”). A mark-up identifying the changes to GN 19 is available here. The changes include:

• the removal of existing section 7 (performance securities covered by sections 8 to 15 of this Guidance Note);
• the addition of a new section 7 explaining how ASX applies GN 19 to agreements to issue or transfer ordinary shares in the future if a nominated performance milestone is met and the issues those agreements can raise under Listing Rules 7.1 and 7.3.4;
• the introduction of a new defined term “arm’s length control transaction securities” in section 8 to describe performance securities issued by a listed entity pursuant to a takeover bid under Chapter 6, or a merger by way of scheme of arrangement under Part 5.1, of the Corporations Act that meet certain conditions, including that the terms attaching to the performance securities (including the performance milestone) conform to sections 9, 10 and 11 of GN 19;
• an amendment to the definition of “ordinary course of business remuneration securities” (now in section 8) to include a requirement that the terms attaching to the performance securities (including the performance milestone) conform to sections 9, 10 and 11 of GN 19;
• the introduction in section 8 of a new concept of “ordinary course of business acquisition securities”, being performance securities issued by a listed entity under an agreement to acquire an undertaking, where:
  • the agreement has not been entered into in connection with a re-compliance listing;
  • the issue is the, or part of the, consideration for the acquisition of the undertaking; and
  • the terms attaching to the performance securities (including the performance milestone) conform to sections 9, 10 and 11 of GN 19 and have been approved by the board or a committee of the board;
• the addition of clear statements at the beginning of each of sections 8 (Applying for in-principle advice about performance securities), 12 (ASX’s requirement for security holder approval) and 13 (ASX’s requirement for an independent expert’s report in some cases) stating that they do not apply to arm’s length control transaction securities, ordinary course of business remuneration securities or ordinary course of business acquisition securities; and
• a number of other drafting improvements intended to make the guidance clearer and easier to follow.

ASX released updates to ASX Listing Rules Guidance Notes 5 Chess Depositary Interests and 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B on 9 December 2020. They are available on the ASX website at:

Guidance Notice 5
Guidance Notice 8

The change to Guidance Note 5 is relatively minor – an amended footnote addressing the use of the CHESS settlement facility by entities formed in Israel, noting the need for those entities to have a provision in their constitution that securities holders are not entitled to a certificate for their securities.

The changes to Guidance Note 8 are more significant and include substantial enhancements to the materials on earnings guidance and earnings surprises in sections 7.1 to 7.3 of, and worked examples F and G in Annexure A to, that Guidance Note. This includes important new guidance that:

“Where an entity does not have published earnings guidance on foot for the current reporting period and it is covered by sell-side analysts, ASX would recommend that the entity carefully consider notifying the market of a potential earnings surprise if and when it expects there to be a 15% or greater difference between its actual or projected earnings for the period and its best estimate of the market’s expectations for its earnings (applying the guidance under the question 2 above ‘How does an entity translate sell-side analyst forecasts into an estimate of the market’s expectations for its earnings?’).”

ASX has also taken the opportunity to make some minor editorial changes to Guidance Note 8, including noting the recent and important decision in ASIC v Big Star Energy Limited (No 3) [2020] FCA 1442 (see footnote 111). In that case, the Federal Court held that a listed entity breached Listing Rule 3.1 and section 674(2) of the Corporations Act by announcing the sale of a significant asset without disclosing: (a) the identity of the purchaser; (b) that the entity had done no due diligence to verify the capacity of the purchaser to complete the purchase; and (c) that the entity had in fact been informed by the purchaser that it had not yet received all funding approvals required to complete the purchase. The transaction ultimately failed to complete. The court specifically rejected an argument by the entity that because the purchase was for a cash consideration, the identity of the purchaser was not material.

Mark-ups of the changes to the Guidance Notes 5 and 8 are available at:

Guidance Notice 5 - mark-ups
Guidance Notice 8 - mark-ups

Compliance update 09/20

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Compliance Update 02/20

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Updates to:

• Guidance Note 9 Disclosure of Corporate Governance Practices - to reflect the coming into effect of the fourth edition of the Corporate Governance Principles and Recommendations 
• Guidance Note 35 Security Holder Resolutions - to correct the summary of listing rule 3.13.2 in section 13 of the Guidance Note 

Compliance Update 09/19 &

 Compliance Update 11/19

Listing fees: Guidance Note 15A:

• schedules of Annual Listing Fees and Fees for Quotation of Additional Securities have been updated, effective 1 July 2019
• definition of “Simple Corporate Bond” in footnote 5 has been updated to refer directly to the Corporations Act rather than the amending Act.