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The Australian Securities Exchange (ASX:ASX) will be taking poor disclosure from market-listed companies far more seriously through this next calendar year.
The warning, which ASX shared with The Australian as the first week of 2025 trade slowly wrapped up, will see the exchange operator expand its censure powers and more aggressively hunt disclosures “not up to scratch.”
In years past, the operator has only used its powers sparingly at best.
Since 2019, when the powers were first handed to ASX Ltd, any company short on standards could face formal public cautions (read: ‘please-explains’). The ASX can also refer any “bad behaviour” to the ASIC for further investigation.
(ASIC has recently been looking into several companies for disclosure already, including Magnis Energy Technologies and its reigning chairman, Frank Poullas.)
This year, the operator will now be looking to contact at-fault boards as quickly as possible, especially when it comes to suspected disclosure issues.
One particular focus will be share price movements that spike more than 10% after big announcements or results reporting during those seasons; the argument is forward guidance is lacking if markets move that much.
Right now, the ASX can also wield stopping power against companies – any time a company is in question it can immediately be placed in a trading halt or be suspended.
ASX chief compliance officer Daniel Moran also warned tougher reviews may be introduced.
“We might also impose a requirement under the rules to engage a third party to do a review or issue a report or do an audit and put in place new disclosure policies,” Mr Moran told News Corp this week amid his warnings.
“The thinking is all of these things shine a light on the market so investors understand that a company and its management aren’t doing what they ought to be.”
There will also be one final focus from the ASX, Mr Moran confirmed: Middle and lower-ranked companies outside the ASX 200, especially those that may quietly be “ramping” share prices through well-polished releases.
“It’s an ongoing area of focus,” Mr Moran said.
“When it jumps over into pumping… we jump on that pretty quickly.”
ASX inched up 0.05% through morning trade after its warnings.
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