| Tom Bloomfield
Currently, investment entities (IEs) must disclose the net tangible asset backing (NTA Backing) of its securities within 14 days after the end of each month. Following the amendments to the Listing Rules, which came into effect in December 2019, changes to:
will apply from the quarter ending 31 March 2020 and onwards.
Annual Report disclosures have also changed and will apply to Annual Reports currently under preparation and subsequent Annual Reports.
As mentioned earlier, currently IEs must disclose the NTA backing of their securities within 14 days of the end of each month, rather than when it becomes aware of the information. IEs will now need to provide that information at the end of each month immediately once it is “available for release to the market” and, in any event, no later than 14 days after the end of each month. “Available for release to the market” means when it has been properly compiled, verified and approved. Consequently, this may shorten the time when the NTA Backing information must be provided to the ASX.
A change has been made to the definition of “net tangible asset backing” in ASX Listing Rule 19.12 (see https://www.asx.com.au/documents/rules/Chapter19.pdf) . Generally, the values used to determine the NTA Backing must be determined in accordance with Australian Accounting Standards (including in particular, Australian Accounting Standard AASB 13 Fair Value Measurement) or other standards agreed by ASX.
The changes to ASX Listing Rule 4.10.20 requires IEs to disclose the following additional information in their Annual Report:
ASX Listing Rules 4.10.4 and 4.10.7 require Annual Reports to also disclose the following (this applies to IEs and all other entities):
Substantial holding notices whether given to the entity under the Corporations Act 2001 or any equivalent overseas law; and
In a distribution schedule of holders, inclusion of the total percentage of securities held by the holders in each category. For example:
|1,001 – 5,000||300||21.43%|
|5,001 – 10,000||200||14.29%|
|10,001 – 100,000||300||21.43%|
|100,001 – and over||100||7.14%|
We recommend that IEs review the changes with their accountants to ensure that the same are captured for the next and subsequent NTA Backing disclosures and Annual Reports.
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