For companies that trade in the U.S. securities markets, one of the many public policy questions arising from the recent change in Administration is how President Trump’s promise to engage in significant deregulation will affect the Securities and Exchange Commission’s disclosure requirements. Some answers are beginning to emerge. During the past several weeks, Congress and the President have invalidated one controversial SEC disclosure rule, and the SEC has announced that two others are under reconsideration. Legislation is reportedly being drafted to scale back a fourth requirement.
(with contribution from Chloe Choo, chambering pupil at Wong & Partners, member firm of Baker & McKenzie International.)
On January 19, 2017, the Malaysian Securities Commission (SC) announced amendments to its Equity Guidelines, Prospectus Guidelines and Asset Valuation Guidelines to introduce a new framework for the listing of mineral, oil and gas (MOG) corporations on the Main Market of Bursa Malaysia, particularly those engaged in the exploration or extraction of MOG resources. The amendments were made following the receipt of feedback from investors, industry experts and a public consultation on its proposal to introduce the framework.
The framework is intended to expand opportunities for MOG businesses to enter the equity market and will take effect from March 20, 2017. It covers listings of MOG corporations either directly through initial public offerings, indirectly through acquisition by listed companies, or a qualifying acquisition by special purpose acquisition companies.Read more…
Baker McKenzie’s analysis of 2016 healthcare IPOs shows a record year for biotech led to a 2% increase in capital raised from healthcare IPOs in 2016 despite a 39% decline in the volume of listings. Biotech deals, which include healthtech listings, continue to dominate the sector in terms of value, accounting for 45% of total capital raised with USD 8.16 billion from 27 deals.
“While healthcare IPOs volume slowed in 2016, the sector outperformed in a poor year for IPOs generally. Biotech companies had a record year, building on year-on-year growth. Healthtech companies seeking additional capital to commercialise their technologies globally and fund further research and development, are becoming more active as the potential for personalised healthcare attracts interest and investment,” noted Ben McLaughlin, Global Chair of Baker McKenzie’s Healthcare group.
On the cross-border front, there was a marked decline in cross-border healthcare listings in line with the overall market, with 15 listings raising USD1.6 billion, down from USD4.8 billion in 2015. Still, North American exchanges continue to attract the most number of cross-border listings of companies seeking better valuations from large, well informed investor bases.
For more insight on cross-border listings for healthcare companies, visit bakermckenzie.com.
The Australian Securities Exchange (ASX) has amended its Listing Rules to implement changes to its admission requirements which took effect from 19 December 2016.
Key changes are:
- increasing the requirement for profit test entities to have consolidated profits for the 12 months prior to admission from A$400,000 to A$500,000
- amending the requirements to satisfy the assets test by increasing:
- the net tangible assets (NTA) requirement from A$3 million to A$4 million; or
- the market capitalisation requirement from A$10 million to A$15 million
- standardising the A$1.5 million working capital requirement for those companies admitted under the assets test
- requiring asset test entities to disclose to the market two full financial years of audited accounts, and also for any significant entity or business that it has acquired in the 12 months prior to applying for admission or that it proposes to acquire in connection with its listing
- introducing a 20% minimum free float requirement for securities held by non affiliated security holders
- creating a single tier spread test of at least 300 non affiliated security holders each holding at least A$2,000 of securities
- emphasising ASX’s absolute discretion to decide whether to allow a company to list, which is particularly relevant to international companies from emerging economies as ASX typically will undertake a pre-vet process to determine admission suitability through its Policy and Listing Standards Committee
In some respects, the new admission requirements are less rigorous than those previously proposed by ASX. In many respects, these changes are not materially different from the previous requirements and will not pose any greater impediment or burden on entities seeking to list on the ASX. However, changes to the requirements for a minimum free float of 20% and audited accounts for companies seeking admission under the assets test may be more difficult to satisfy than the previous admission criteria.
The new rules are intended to maintain appropriate listing standards and investor confidence in the ASX market, while providing a pathway for companies to list and access capital across their lifecycle.
More information about the changes, as well as a comparison of old and new requirements is available on our client alert on bakermckenzie.com.