Last week I wrote to the ASX to enquire as to why MST had not...

Last week I wrote to the ASX to enquire as to why MST had not been put into a trading halt in reference to all of the delays.
This morning I received an email from the ASX - it appears to be a standard letter - in summary they cannot disclose private issues.



Metal Storm Limited (the "Company")

Thank you for your correspondence dated 3 December 2009. ASX Markets Supervision Pty Ltd ("ASXMS") appreciates information that is gathered from the public as it assists with our supervisory function.

In your correspondence you raise concerns as to whether the Company should be placed in a trading halt following the Company’s recent announcements entitled "Equity & Debt Placement Update", which have been released to the market by the Company between 4 November 2009 and 3 December 2009 (the "Announcements").

ASXMS is principally concerned with the timely disclosure of that information which may affect security values or influence investment decisions, and information in which security holders, investors and ASX have a legitimate interest.

The fundamental principle underlying listing rule 3.1, the rule for continuous disclosure, is that where a listed entity becomes aware of information that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, it must immediately tell ASX that information subject to certain exceptions which must be met contemporaneously and are set out in listing rule 3.1A. In the event that a listed entity is unable to immediately tell ASX that information, ASX may, in certain circumstances, deem it appropriate for the listed entity’s securities be placed in a trading halt or suspended.

Both a trading halt and a suspension ensure that trading in a listed entity’s securities is prohibited for a certain period of time. A trading halt is a temporary halt to trading in a listed entity’s securities, which, once granted by ASX, will remain in effect for up to a maximum of two trading days. Similarly a suspension also results in trading in a listed entity’s securities being prohibited, but unlike a trading halt, there is no maximum duration that a listed entity’s securities will remain suspended. A suspension may be as a result of a request from a listed entity, or imposed by ASX (that is, not at the request of the listed entity).

In either case, the trading halt or suspension is deemed appropriate where, without the information, the market is not fully informed and it is inappropriate for the market to trade again until such information has been provided. A trading halt or suspension is lifted upon the listed entity providing an announcement to ASX that contains the information that the listed entity was unable to provide at the time that the listed entity’s securities were placed in a trading halt or suspended.

Your observations in relation to the Announcements have been reviewed for the purposes of listing rule compliance and in particular compliance with listing rule 3.1. Any investigation which ASXMS undertakes regarding a listed entity is confidential and any discussions that ASX may have with listed entities concerning the ASX Listing Rules and their application are confidential and not part of the public record. As a result, ASXMS is unable to respond to your complaint in specific detail.

However, we can advise that, in general, if ASX believes that an entity may not be in compliance with the Listing Rules, or it had concerns in relation to trading issues, it would, in the first instance, raise the issue with the entity concerned and, where necessary, refer the issue to other departments within ASX for further review. Consequently, if ASX forms the view that disclosure is required, it would take action to ensure that the entity concerned makes such disclosure to the market within an appropriate time frame. In conducting our review nothing has come to our attention to indicate that the market is not fully informed as to the Company’s financial condition or that Company did not comply with the ASX Listing Rules.

If you require any additional information in relation to the ASXMS function, please refer to the following link.

http://www.asx.com.au/supervision/issuers/

Thank you once again for raising your concerns with ASXMS.