Corporate Finance Update - Issue 24
Issue 24, August 2025
Contents
Keybridge Capital and Yowie Group restricted from issuing reduced-content prospectuses
Director disclosure obligations for changes in interests
ASIC calls for better disclosure in independent expert reports
ASIC launches newsletter on reporting and audit and sustainability relief register
Keybridge Capital and Yowie Group restricted from issuing reduced-content prospectuses
On 6 August 2025, ASIC restricted Keybridge Capital Limited (Keybridge) and Yowie Group Limited (Yowie) from issuing reduced-content prospectuses for 12 months, under section 713 of the Corporations Act 2001 (Corporations Act).
The determinations followed Keybridge and Yowie’s respective failures to lodge a financial report, directors’ report, and auditor’s report for the half-year ended 31 December 2024, within 75 days, as required under the Corporations Act.
Until 6 August 2026, Keybridge and Yowie must issue a full prospectus if they wish to raise funds from retail investors or satisfy disclosure requirements for other purposes (for example, in the case of a bidder offering scrip consideration under a Chapter 6 takeover bid).
We consider the ability to rely on reduced content rules under section 713 of the Corporations Act a privilege, dependent on compliance with other aspects of the law, including ongoing financial reporting obligations.
Where a company fails to comply with its financial reporting obligations in a full, accurate and timely manner, we will intervene to ensure that retail investors are protected.
Director disclosure obligations for changes in interests
Following multiple instances of non-compliance, ASIC reminds directors of listed public companies of the requirement to disclose changes to their interests via an Appendix 3Y - Change of Director’s Interest Notice.
Under section 205G of the Corporations Act 2001, directors must notify the relevant market operator of changes to certain contracts and to their relevant interests in securities within 14 days. Additionally, ASX Listing Rule 3.19A requires notification to the ASX within five business days of any such change.
Further guidance for complying with these obligations is available Regulatory Guide 193 Notification of directors’ interests in securities—listed companies (RG 193) and ASX Director Disclosure of Interests and Transactions in Securities – Obligations of Listed Entities (GN 22).
ASIC considers these obligations essential to the regulatory framework supporting market integrity, together with bans on insider trading and market manipulation.
Non-compliance may result in serious consequences, including financial penalties, disqualification from directorship, or imprisonment.
Control implications arising from structuring of rights issues and associated underwriting arrangements
ASIC has recently raised concerns with issuers regarding the structuring of certain rights issues.
These concerns relate to transactions which did not sufficiently mitigate the potential for existing holders and/or underwriters taking a controlling position as a result of the offer. ASIC also noted concerns with inadequate or inaccurate disclosure of the potential effect and consequences of the rights issue and/or underwriting arrangement.
When structuring rights issues, and associated underwriting and/or sub-underwriting arrangements, issuers should carefully consider suitable mechanisms to limit potential control implications. Where transactions rely upon rights issues and/or underwriting exceptions to the general prohibition, we will consider if they have been designed to avoid the purposes of Chapter 6 provisions or may have an unacceptable control effect. We will also consider if adequate disclosure of the potential effects and consequences has been made. Where we have concerns, we will raise these with the relevant parties and may take action if these are not adequately addressed.
An alternative to relying on the rights issue and/or underwriting exception is to have the acquisition by a holder and/or underwriter approved by members. This is one way an issuer can address any potential unacceptable control effects.
For more information, see Regulatory Guide 6 Takeovers: Exceptions to the general prohibition (RG 6) and the Takeovers Panel’s Guidance Note 17 Rights issues (GN 17).
ASIC calls for better disclosure in independent expert reports
ASIC is calling on experts to improve their disclosures in independent expert reports (IERs) following recent recurrent concerns.
The concerns relate to insufficient disclosures of material assumptions relied upon by the expert, the basis for choosing valuation methodologies, and the selection of valuation figures and valuation ranges.
We encourage experts to carefully consider disclosures when drafting IERs to ensure that key information is provided. This assists security holders to make informed decisions about transactions and minimises the chances of delays during live transactions.
ASIC reminds experts of our policy on the content of expert reports in Regulatory Guide 111 Content of Expert Reports (RG 111). This includes (though is not limited to):
- disclosing all material assumptions on which the IER is based, with sufficient specificity (see RG 111 at paragraphs 91 – 94)
- justifying the choice of valuation methodologies, and describing the methods used (see RG 111 at paragraphs 81 – 89), and
- clearly explaining the selection of specific valuation figures and valuation ranges.
Independent experts play a gatekeeper role in corporate transactions, and their reports are relied on by investors to make financial decisions. We will continue to review expert’s reports and consider taking action where we have ongoing concerns about appropriate report disclosures and explanations. Two recent examples of our actions includes our acceptance of a court enforceable undertaking from PKF Melbourne Corporate Pty Ltd and a voluntary variation of the Australian financial services licence of AP Lloyds Pty Ltd.
ASIC launches newsletter on reporting and audit and sustainability relief register
ASIC recently launched its Reporting and Audit Update, a quarterly newsletter for report preparers, auditors, professional advisors, and users of reports who are interested in keeping up to date with the regulatory developments affecting reporting and audit.
You can now also view ASIC’s sustainability reporting and audit relief decisions, on our new Sustainability reporting and audit relief decisions register. This is where ASIC publishes the decisions made under its exemption powers in the Corporations Act 2001 that relate to sustainability reporting and auditing matters.
The register will be updated on a quarterly basis as new decisions are made (including where ASIC refuses to exercise relief).
Since the Reporting and Audit Update will now cover regulatory developments on sustainability and financial reporting and audit matters, the Corporate Finance Update will generally no longer include articles on these topics.
To subscribe, visit news alerts, select ‘ASIC’s news round up’, then ‘corporate reporting and auditing’, and finally ‘subscribe’.