Swain awaits ASX reply over listings

By ELLEN READ

Commerce Minister Paul Swain will learn this month what, if any, notice the Australians are taking of him.

Last night he issued the text of his letter to the Australian Stock Exchange (ASX) on its proposed foreign-exempt status changes and said an ASX discussion paper would be issued before the end of the month.

Last October the ASX gave notice it planned to tighten its foreign-exempt listing criteria, a move that would affect more than 20 New Zealand companies.

They now can be listed as foreign-exempt provided they have net tangible assets of $A50 million ($60.44 million) or profit before tax in each of the three previous years of $A10 million.

Under the planned changes, these amounts would rise to $A2 billion and $A200 million respectively - shutting out many New Zealand companies.

Foreign-exempt companies are not subject to most ASX listing rules, but must supply the exchange with reports and notices provided to their home bourse.

Under the alternative - a full dual listing - they would be governed by the ASX continuous disclosure rule - an extra obligation to prospectus disclosure and periodic financial returns.

Historically, New Zealand companies have been given preferential treatment on foreign-exempt status by not having to meet either the profit test or net tangible asset test.

Among New Zealand companies affected are The Warehouse and Waste Management.

Mr Swain's letter to the ASX outlined his concerns, saying the changes would increase compliance costs for companies that had to move to dual listings.

"I have pointed out that, consistent with the CER [closer economic relations] Agreement and memorandum of understanding on Business Law Co-ordination, we should be looking to reduce the costs of firms having to comply with multiple laws in a transtasman market, not make it more complicated," Mr Swain said.

"Suggestions that the ASX might treat New Zealand listed companies precisely the same as any other foreign listed entity is a backward step, and one that I personally would not like to see taken.

"I recognise that it is the ASX's prerogative to change the rule. For this reason I have suggested, if the rule change does happen, that we work together to minimise compliance costs for dual-listed companies."