ASX has announced a revised approach to requiring counterpartiesto material contracts to be named. A counterparty will not need to bespecifically named where the entity has formed the view that the counterparty’sname is not price sensitive provided the announcement includes specificinformation about the counterparty and the entity’s compliance with itscontinuous disclosure obligations under Listing Rule 3.1.
ASX’s guidance in section 4.15 of Guidance Note 8 remains the samewith the overriding principle that counterparties should be specifically namedto allow the market to assess the impact of the transaction on the price orvalue of the entity’s securities. Historically, ASX has allowed a counterpartyto remain unnamed where the description of the counterparty is sufficientlydetailed to allow the market to assess its standing and creditworthiness.Previously, this has been limited to situations involving government agenciesor entities in the defence or security industries.
ASX has now extended the circumstances where disclosure of theidentity is not required if the announcement:
confirms that the entity does not consider the counterparty’s identity to be information that a reasonable person would expect to have a material effect on the price or value of the entity’s securities;
confirms that all material information relevant to assessing the impact of the contract on the price or value of the entity’s securities has been included in the announcement and the announcement is not misleading; and
includes a sufficient description of the counterparty to ensure that any market sensitive information (such as standing and creditworthiness) is included.
In all cases, ASX may still request further disclosure followingthe announcement and retains the right to take further action if there is amaterial movement in the entity’s security price following the release of theannouncement in circumstances where the above requirements are not sufficientlycovered, or the announcement is incomplete, inaccurate or misleading.
ASX will not accept as an excuse that the entity is simply subjectto a confidentiality obligation and if ASX has any concerns that anannouncement is a ‘ramping announcement’, it will take enforcement actionincluding halting or suspending trading.
ASX’s Compliance Update can be accessed here.