LIC Governance Spotlight: Proposed ASX Listing Rule Change

5 Dec 2018

In this update we outline the proposed changes to the ASX listing rules and their potential impact on Listed Investment Companies (LICs) and Listed Investment Trusts (LITs).


On 28 November 2018 the Australian Securities Exchange (ASX) released a public consultation paper titled, ‘Simplifying, clarifying and enhancing the integrity and efficiency of the ASX listing rules’. The stated purpose of the paper is to simplify, clarify and enhance the integrity and efficiency of the ASX listing rules, which have not been updated in a major way since 2016. Subject to the receipt of the necessary approvals, the ASX anticipates implementing the changes in May 2019, to take effect on 1 July 2019. The proposed changes are summarised below, with one proposal being specific to LICs and LITs.

The Proposed Changes Affecting LICs and LITs

The ASX intends to amend the disclosures by LICs and LITs of their Net Tangible Asset (NTA) backing. The stated reason for the proposed changes is to address recent issues the ASX has with some LICs and LITs regarding their valuation methodology for investments in unlisted securities, and additionally from a desire to standardise and improve NTA reporting generally.

The specifics of these proposed changes are:

  • amending the definition of “net tangible asset backing” in listing rule 19.12 to clarify its intended operation, including clarifying Accounting Standards and adding notes to the descriptions of certain variables forming part of the calculation;
  • amending listing rule 4.10.20 to require additional disclosures by a LIC/LIT in its annual report to include the values of its individual investments, the inputs used to value its investments in accordance with Australian Accounting Standards, and the NTA backing of its quoted securities at the beginning and end of the reporting period accompanied by an explanation of any change over that period;
  • amending rule 4.12 to require a LIC/LIT to disclose its monthly NTA as soon as that information is available (still within 14 days), as the ASX states the current rule allows a LIC/LIT to wait for 14 days after month end to disclose this information, even if it is ready earlier; and
  • allowing automatic suspension of a LIC/LIT by adding the monthly NTA requirement to the list of documents that must be lodged on time under listing rule 17.5.

Other Proposed ASX Listing Rule Changes

Other proposed changes include:

  • disclosure of meeting results – proposing a standard format;
  • voting by employee plan participants – confirming that a participant that would otherwise be excluded from voting must also be excluded from voting through an employee share plan trustee;
  • placement capacity under rule 7.1 and rule 7.1A – rationalising the current process of calculation, disclosure and amending the exceptions;
  • changes to the requirements for Notices of Meetings;
  • changes to the voting exclusion provisions;
  • updating timetables for corporate actions and shortening the period of deferred settlement trading;
  • introducing the ability for the ASX to censure a listed entity for breach of the listing rules;
  • updates to several Guidance Notes;
  • ASX lodgement – proposing that the persons appointed to be responsible for communication with the ASX on listing rule issues have an adequate level of knowledge of the rules; and
  • eliminating the need to apply for a number of standard waivers – amending a number of rules to remove the need to apply for standard waivers.

The full text of the consultation paper detailing the entirety of the proposed changes is available here.

Submitting Feedback to the ASX

LICs/LITs wishing to make a submission with feedback on the proposed changes to the ASX listing rules are encouraged to so in writing by the close of business on Friday 1 March 2019 to

This update is prepared by the Company Secretarial Team at Boardroom Pty Limited. The update is designed to provide general information and is not designed to replace legal or tax advice or a detailed review of the subject matter nor is it intended to cover all circumstances.

Click here to download a printable PDF file.

Contact BoardRoom for more information:

Tom Bloomfield

General Manager, Growth & Partnerships
+61 2 9290 9617