Lawyers have welcomed the ASX’s revised version of Guidance Note 8 on continuous disclosure for listed entities. The guidance has been released with the support of the Australian Securities and Investment Commission (ASIC) for consultation and according to lawyers, offers a “helpful and pragmatic” approach to continuous disclosure. “It is very practical guidance,” said Herbert Smith Freehills partner Tony Damian. “There is a lot of detail and practical examples.”

Clayton Utz partner Geoff Hoffmann added that the guidance in the new note have addressed issues in the current market which were causing uncertainty. “It tries to address a lot of the uncertainties that were troubling the market. But, no doubt, over time there will be more questions which will require further guidance,” he said.

Two of the key messages repeated throughout the revised guidance are the re-emphasis of the need for entities to assess the impact that information will have on their share price and the fact that sudden and significant movements in an entity's market price will continue to drive the exercise of ASX's discretion and enforcement powers in respect of the continuous disclosure obligations.

ASIC has “welcomed” the guidance and will continue to work with the ASX on the formation of continuous disclosure rules. “A key part of effective continuous disclosure is having the right systems in place and being prepared. Updated guidance about continuous disclosure will help companies achieve this,” said a statement from the regulator. “I think those instances where ASIC has undertaken enforcement in recent times, the principals and guidance set out in these rules are in line with those actions.”

Damian added: “If ASIC also now takes a practical approach to these matters, then it will provide certainty for the market. But, if ASIC takes a different tack as regards its approach and its enforcement actions, then it will not provide as much certainty for corporates.”

In takeovers for example, clarity over disclosure obligations when there is a confidential approach being made may increase the willingness of companies to make approaches, without fear of a target company being obliged to disclose, though of course a target may choose to do so, said Damian.

While the Guidance Note 8 is “lengthy” according to practitioners, it is not overly legalistic and provides many case studies for corporate to base their own actions on when dealing with disclosure. The formal submission period closes on November 30 and the ASX is expected to adopt the revised guidance in the first quarter of 2013.