OVERVIEW OF THE WAIVER DISCLOSURE CHANGE

ASX has standardised its approach to public disclosure of waivers. Historically, ASX has published details of waivers in a waivers register on its website, usually twice monthly, and in some cases required the applicant to make its own disclosure as a condition of the waiver. There is typically a five to eight week period between when a waiver is granted and when it is published in the waivers register, creating a potential information gap.

Under the new approach, making an entity-led market announcement about a granted waiver will be a standard condition of a waiver, so the market is informed promptly in the period between ASX granting the waiver and ASX publishing its waivers register.

TIMING AND THE CONFIDENTIALITY EXCEPTION

Ordinarily, an entity must release the drafted statement to the Market Announcements Platform within one business day of ASX advising that the waiver has been granted. If the waiver relates to a confidential and incomplete proposal or negotiation, disclosure may be delayed until the matter is no longer confidential or incomplete, so the waiver is not disclosed earlier than the announcement of the underlying bid, transaction or other matter. ASX will, in any event, continue to publish all waivers in its waivers register in the usual course.

WHAT APPLICANTS MUST DO NOW

All new standard and non-standard waiver applications should include a draft statement for release to the market, setting out the nature and effect of the waiver and the entity’s reasons for seeking it. The draft should be in the form of a market announcement because, if the waiver is granted, the entity will be required to release that statement either as a standalone announcement or as part of a related announcement. ASX will start systematically applying the disclosure condition to waivers granted from September 2025, although it may apply the condition earlier on a case by case basis. Entities seeking a waiver in sensitive circumstances should consider timing, including seeking in-principle advice first where appropriate.

CONTINUOUS DISCLOSURE EARNINGS SURPRISES AND ‘AWARE LETTERS’

Separately, ASX has reiterated its focus on market sensitive earnings surprises ahead of the reporting season. Where an entity’s reported earnings materially differ from market expectations, and that difference is likely to have a material effect on the price or value of securities, an entity may have an obligation to notify the market under Listing Rule 3.1 and section 674 of the Corporations Act. ASX will pay particular attention during the current reporting period to S&P/ASX 200 entities whose share price moves by 10% or more on the day of results, and, absent other factors that readily explain the movement, ASX is likely to send an ‘aware letter’ seeking an explanation of the entity’s handling of its continuous disclosure obligations.

If an entity receives an ‘aware letter’, ASX expects specific information about dates and times when the entity became aware of any divergence from market expectations, how the entity assessed market expectations, and the basis for any view that the divergence did not amount to a market sensitive earnings surprise. Entities should avoid including commentary on analyst expectations in response to an ‘aware letter’ unless clearly necessary, because ASX may ask for that material to be removed from the response.

NEXT STEPS FOR ENTITIES AND ADVISERS

Entities should update internal waiver application workflows so that a compliant draft market announcement is prepared at the time a waiver application is lodged. They should also review timing for sensitive waiver applications and consider seeking in-principle advice where the timing of ASX’s publication could be problematic. Finally, ahead of the reporting season, entities should refresh their continuous disclosure processes for assessing earnings expectations and, where warranted, prepare timely market announcements to avoid potential scrutiny from ASX.

This article was written by David Naoum, Partner and Lachlan Pearce, Solicitor.