Disclosure obligations under Listing Rules 3.1, 3.1A and 3.1B of ASX Limited (ASX).
3.1 Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information.
3.1A Listing rule 3.1 does not apply to particular information while each of the following requirements is satisfied in relation to the information:
3.1A.1 One or more of the following 5 situations applies: 1.It would be a breach of a law to disclose the information; 2.The information concerns an incomplete proposal or negotiation; 3.The information comprises matters of supposition or is insufficiently definite to warrant disclosure; 4.The information is generated for the internal management purposes of the entity; or 5.The information is a trade secret; and
3.1A.2 The information is confidential and ASX has not formed the view that the information has ceased to be confidential; and
3.1A.3 A reasonable person would not expect the information to be disclosed.
3.1B If ASX considers that there is or is likely to be a false market in an entity’s securities and asks the entity to give it information to correct or prevent a false market, the entity must immediately give ASX that information.
So, consistent with 3.1B and a suspected false market a price query notice was sent.
The following posts are in connection to 3.1A
@bluebrando I've witnessed a number of occasions when an ASX listed company has been issued with a speeding ticket and made a price sensitive announcement a few days later. All BRN's response to the speeding ticket really means is ... the company is not the source of any price sensitive information that may have caused the share price to rise. If an imminent agreement is about to be signed BRN has honoured its obligations not to publicly disclose it until such time as it has been signed. BRN would be perfectly entitled therefore to make an announcement Monday morning if a contract is signed tonight in the USA even though it received a speeding ticket today.
@MarketingMan In an ASX price query response it would not be appropriate for the company to speculate as to why they share price has suddenly escalated on no news.
Because, while it might be reasonable to assume it could be the delayed affect of two recent positive announcements - they don't know for sure. They can't speculate on what motivates each individual to start buying.
The price query from ASX is both a warning and a test "are you sure you aren't about to announce something and/or news has leaked?"
Brainchip's response was perfectly adequate and appropriate. Announcing instead "Yes! in recent weeks we made two brilliant announcements MAYBE this is the delayed effect?" would be frowned upon.
@Fact Finder No. There are various exceptions to the Continuous Disclosure Rules one which springs to mind is the Incomplete Negotiation rule.
If for example two companies had agreed something in principle and handed it off to their lawyers to thrash out the final points and document it in a contract for consideration and signing off until they both put pen to paper the deal remains incomplete.
The bigger the deal the more paper and the longer it takes.
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