Home > Industry > ASX Set To Slam Door On Dodgy Tech Co. Listings

ASX Set To Slam Door On Dodgy Tech Co. Listings

The Australian Securities Commission has proposed slamming the door shut on ASX listings by start-up companies that have little in the way of turnover or profits. A  major target appears to be a number of dubious technology start-ups – some of them based offshore –  with little in the way of either.

The ASX has launched a discussion paper which outlines its thinking on this matter. Among other things it calls for higher financial thresholds for companies seeking to list, including those that have used so-called backdoor listings, allowing themselves to be acquired by dormant but ASX-listed mining companies, of which there is no apparent shortage.

More than 100 technology-based companies have listed on the ASX over the past two years, many with revenues of less than $1 million a year, and as previously noted in CDN, two – Koolsee and Shark Mitigation – with no revenue at all (CDN, May 10).

The situation has also led to concerns that in some cases the ASX is being used by a number of overseas companies seeking a stock exchange listing with lower standards than the US-based Nasdaq.

The tightening of requirements for backdoor listings certainly appears well overdue. More than 70 companies – some of which would not pass the test for a basic listing – opted to use this method between July last year and the end of April 2016.

Under the proposed changes, trading in shares of a company that announces a backdoor listing will be suspended until the entity complies with the latest admission requirements.

Says ASX compliance officer Kevin Lewis: “The ASX is overwhelmingly open for business for small-cap explorers and emerging growth and innovation companies, But you can be too small to list – this is a nuance which maybe has got a bit lost in the weeds.”

You may also like
Sennheiser Open Flagship Sydney Store
Foxtel Fined $25K For Telemarketing Breach
Stan Snares Disney Away From Netflix
UK-Based Dense Air Extends Oz 5G Reach
ACCC Concerned About TPG-Vodafone Merger, Shares Slump