Submission on increasing the placement capacity to small listed companies

The Australian Stock Exchange proposed to increase the placement capacity of small listed companies (defined by the ASX as entities with a market capitalisation below $300 million) from 15 percent of shares on issue to 25 percent of shares on issue without prior shareholder approval.

Ownership Matters made a submission that strongly opposed the increased placement mandate for the following reasons:

  • The proposal interferes with the market for corporate control and would increase the capacity for investors in sub $300 million entities to be substantially diluted against their will.
  • The ASX has presented minimal evidence that the change is required.
  • The proposed changes appear to have been driven by the ASX’s commercial  imperatives.
  • The existing Listing Rule regime, and the proposed changes, does not provide sufficient protection against abusive non-pro rata share issues to related parties, major shareholders and other parties with significant influence over a listed entity.

This submission can be downloaded via the following link:  Submission on increasing the placement capacity for <$300 million stocks