Quantcast
Viewing all articles
Browse latest Browse all 18

ASX continuous disclosure: Guidance Note 8 – how to stay out of hot water

Image may be NSFW.
Clik here to view.
ASX's continuous disclosure obligations and social media - in response to Guidance Note 8

ASX’s continuous disclosure obligations and social media – in response to Guidance Note 8

It’s 9am Monday morning and Sydney’s corporate advisors, company secretaries and in-house investor relations teams have descended on the home of ASX in Bridge Street to get the inside word on the continuous disclosure obligations under Guidance Note 8 (GN8).

ASX Group Executive and Chief Compliance Officer, Kevin Lewis and Deputy Chairman of ASIC, Belinda Gibson are preparing to address the packed auditorium on ASX’s lengthy consultation process, quash a number of misconceptions in the market around the new disclosure rules and consider the practical implications of GN8.

FTI Consulting is pleased to share the inside word on ASX’s Roadshow of GN8.

Continuous disclosure, it’s important

Continuous disclosure by listed companies forms the foundations of market integrity – it’s the cornerstone to ensuring markets are fair and efficient and investors are confident and informed.

Gibson explained that good continuous disclosure is about preparation and organisation, especially as market participants venture deeper into the age of social media and the instantaneous sharing of information.

Being prepared = policies and practices

By having adequate policies and practices in place companies can ensure they know what, how and when to disclose. Companies should ask themselves the following questions:

  • Who has authority to speak on behalf of the company?  Only the CEO and Chairman?  Or also the investor relations or communications team?
  • Is there a rapid response plan in place?  Are all board members, their advisors and senior management familiar with its contents?  Are there contingencies in place should the final decision maker be absent?
  • Do you have a ‘Request for trading halt’ template drafted and ready for use if necessary?  Do you have a scenario plan on when a trading halt will be triggered?
  • Has a draft announcement been prepared in the event confidential information is leaked?
  • Who is the designated contact person to liaise with ASX?  If absent, who else has the sufficient knowledge and authority?

Social media – are you listening?

GN8 has reiterated the importance of companies to stay well-informed of what information about them the market is trading on.  As part of new obligations, GN8 requires companies to monitor any investor blogs, chat-sites or other social media that the company is aware regularly includes posts about it.  Importantly for companies, this does not mean keeping an eye on all social media outlets however companies need to think about sites that are well-trodden social media feeds to a material portion of the investing public.  There are a number of tools readily available to help companies meet these new social media requirements.

In highlighting the complementary nature of social media in keeping the market updated, where the information is price-sensitive, Gibson reiterated the importance of ensuring an announcement is posted on the ASX before posting on social media.  She also encouraged companies to link to their official announcement when posting on social media.

Drafting an announcement?  Things to keep in mind…

Finally when drafting an announcement, Gibson provided a number of helpful pointers for listed entities to keep in mind.  Key suggestions include:

  • use plain English, don’t leave investors reading between the lines
  • no assumed knowledge of the reader
  • use headings to highlight key information: encapsulating the essence of the message in the heading is important as this is often what ends up being reported in the media
  • apply listing rules consistently, whether good or bad news required to be disclosed, companies should avoid “cherry picking” their announcements
  • update the market if things change

50 shades of grey

The very nature of continuous disclosure can sometimes be difficult and increasingly requires companies to make judgment call – leaving companies assessing each situation on a case by case basis. As the new continuous disclosure obligations comes into effect May 1 this year, ASX-listed companies are advised to look at their policies and procedures to ensure they are prepared to act where disclosure is required.

Kevin Lewis’ presentation is available online.

Related:

FTI Consulting on ASX continuous disclosure and social media presentation


Image may be NSFW.
Clik here to view.

Viewing all articles
Browse latest Browse all 18

Trending Articles