Acclime’s corporate snapshot – September 2022.

ASX issues warning about timing of AGM notices

The ASX has again drawn attention to the timing of draft AGM notices.

Almost 90% of listed entities use a 30 June balance date, and must therefore hold their AGMs before 30 November. All of them must submit their draft notice of AGM to the ASX for review before they go out to security holders. The ASX then has 5 working days (with an option for extension) within which to consider objecting to the notice.

In a recent Listed@ASX Compliance Update, the ASX has asked entities to keep these deadlines in mind, especially where there are complex issues or multiple resolutions that need consideration.

It’s also possible to obtain a waiver of the time rules for submission of AGM notice drafts – just be aware that waiver applications themselves are subject to time rules.

CHESS Replacement ushers in Tranche 3, as ASX announces more delays

ASX released CHESS replacement project updates on 3 August, 31 August and 14 September 2022 (available here).

Recently the project has examined the Settlement Operating Rules, Clear Operating Rules, Operating Rules and Enforcement and Appeals Rulebook, to consider amendments. A 31 August consultation paper focused on the third tranche of operating rule amendments.

But it was the 3 August update that drew attention, announcing further delays in developing the software.

The amendments target multiple areas of CHESS functionality around clearing and settlement of trades and also asset registration and post-trade services.

Consequential effects upon issuers in negotiating CHESS are likely to be managed in the first instance by share registries. But there are also ways in which ASX expects issuers to help usher in the changes.

In a 3 August media release, ASIC acknowledged the appointment of Accenture to oversee a review of the CHESS Replacement, noting with disappointment that the project has been beset by delays.

The Accenture review is expected to take approximately 12 weeks. Based on current information, ASX do not expect the go-live date for the new CHESS to be before late 2024.

Key Insights from the 2022 “mini” AGM season

Computershare have reported on the 144 AGMs they managed in Australia between January and May this year.

Their findings show the lingering impact of COVID lockdowns: companies with less than 20,000 shareholders have been the most likely to hold an ‘in-person’ AGM, while overall there’s been a 7% increase in hybrid meetings, reflected in reductions in both in-person and fully digital meetings.

Our preference for hybrid meetings in Australia stands in marked contrast to the rest of the globe.

Meanwhile shareholder attendance in Australia is largely unchanged from the previous year, and there was clear evidence that companies which had experienced a significant event in their year were seeing higher attendances, both in-person and virtually.

ASIC’s new 4-year corporate plan

Over the coming four years, ASIC will be focusing on four key areas:

• Design and distribution obligations
• Retirement decision making
• Sustainable finance
• Technology risks

These subjects reflect a regulatory environment in which climate, ageing demographics, new tech and crypto are set to dominate the news. There is a clear willingness to be an “active litigator” – an interesting synergy with ASIC’s new Design and Distribution Obligations scheme.

Allens Linklaters have prepared an excellent guide to the plan, which you can access here.

Sources of information: Australian Securities Exchange Ltd. (ASX); Australian Securities and Investments Commission (ASIC); Link Group; Computershare; Allens Linklaters.

Disclaimer: Acclime Corporate Snapshot is only intended to provide a general overview on matters of interest. It is not intended to be comprehensive and is not legal advice. Acclime Australia attempts to ensure that content is current but we do not guarantee its currency. You should seek legal and/or professional advice before acting or relying on any content.