ASX Escrow and Required Changes to Constitutions
As announced by ASX on 28 November 2018 in its public consultation paper titled “Simplifying, Clarifying and Enhancing the Integrity and Efficiency of the ASX Listing Rules”, ASX is proposing to introduce a two-tier escrow regime, to take effect from 1 December 2019.
As is currently the case, ASX can (and will) require certain holders of restricted securities (e.g. related parties, promoters and substantial holders) and their controllers to execute a formal escrow agreement in the form of Appendix 9A. However, under the proposed regime, for less significant holdings, ASX will instead permit entities to rely on a provision in their constitution imposing appropriate escrow restrictions on the holder of restricted securities and to simply give a notice to the holder of restricted securities in the form of a new Appendix 9C advising them of those restrictions.
The proposed changes will include an update to ASX Listing Rule 15.12 which will apply to entities admitted to the official list or that issue restricted securities on or after 1 December 2019. Entities that were admitted to the official list and issued restricted securities before that date must continue to comply with the provisions of Listing Rule 15.12 in force immediately prior to that date.
Important
The contents of this publication should not be relied upon as legal advice, but instead as commentary and general information. Specific legal advice about your circumstances should always be sought separately before taking any action based on this publication.
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George Henderson
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