The ASX’s Listed@ASX Compliance Update (16 May 2025) highlights critical updates for listed entities. Below is a detailed summary of key changes to Listing Rule 7.1A and rights issues during suspension.
Listing Rule 7.1A: Additional 10% Placement Capacity
Listing Rule 7.1A enables eligible small to mid-cap entities to raise capital equivalent to 10% of their ordinary issued capital, in addition to securities issued without shareholder approval under Listing Rule 7.1. Eligibility requires a market capitalisation below $300 million and exclusion from the S&P/ASX 300 Index at the annual general meeting (AGM) where approval is sought. A special resolution at the AGM grants a 12-month mandate, which remains valid even if the entity later exceeds $300 million in market cap or joins the S&P/ASX 300.
The mandate expires at the earliest of:
- The next AGM;
- 12 months post-AGM; or
- Shareholder approval of a significant change under Listing Rules 11.1.2 or 11.2.
Securities issued under this mandate must:
- Be in an existing quoted equity class (e.g., no unquoted options or performance rights);
- Be issued for cash only (not for services or nil consideration); and
- Meet minimum pricing requirements per Listing Rule 7.1A.3.
Entities must calculate placement capacity using the formula in Listing Rule 7.1A.2 and submit a standard worksheet to their Listings Adviser with market notifications. ASX does not pre-vet these calculations, and entities are responsible for accuracy. Notices of meeting must include a dilution table with at least three scenarios, including one assuming double the current ordinary securities and a 50% price drop, plus a detailed allocation policy. Prior issues within the past 12 months reduce available capacity unless ratified under Listing Rule 7.4, which requires the issue to have been within capacity at the time.
Rights Issues During Suspension
ASX generally prohibits renounceable rights issues if an entity’s securities are suspended, as trading provides essential price signals for investors. For non-renounceable rights issues, Listing Rule 7.11.3 caps the offer ratio at 1:1. However, if securities are suspended, ASX may grant a waiver to exceed this ratio, allowing entities to raise sufficient capital. This non-standard waiver requires:
- Shareholder approval;
- A voting exclusion statement in the notice of meeting, covering substantial security holders, underwriters, sub-underwriters, brokers, managers, and their associates; and
- Continued suspension until the issue completes and ASX conditions are met.
Entities may also seek a waiver from Listing Rule 7.15 to set a record date before the shareholder meeting, as suspended securities prevent cum or ex-rights trading. Applications must align with Guidance Note 17.
If you require any advice on ASX compliance, please contact Glenn Vassallo, Scott Standen or Dale Copley for assistance.
