27 Mar 2013

Change of disclosure rule for ASX

1:37 pm on 27 March 2013

Australia's stock market operator, the Australian Securities Exchange, is changing its continuous disclosure rules.

Under the present rules, firms are obliged to immediately inform the market of any information a reasonable person believes will have a material impact on its share price.

But under its new guidelines, the ASX redefines the meaning of "immediately" to allow more directors more time.

Thomas Clarke from the University of Technology Sydney says it means proper investigations can now be made to check the veracity of price-sensitive information before the market has to be informed.

The new definition of immediate would not have helped Leighton Holdings, which was fined $A300,000 and is facing a class action from disgruntled shareholders after it stunned the market with a $A400 million loss in 2011, just weeks after saying it would make a $A500 million profit.

The ASX is also encouraging firms to make greater use of trading halts in situations where they can't quickly decide what they need to tell the market.

It says that will stop trading in an ill-informed market and also send a warning that potentially market-sensitive information could be on the way.

The ASX is starting a series of national roadshows next week to explain the new continuous disclosure regime, which is scheduled to start on 1 May.