A raft of issues with tech start-ups has led to the ASX moving to tighten its disclosure and compliance obligations to give investors another layer of protection – further complicating the process undertaken by companies seeking to list publicly.
The move comes after cloud-based start-up GetSwift Ltd (ASX: GSW) faced allegations it failed to update the market over the loss of significant contracts and issues faced with media and video company BIG Un Ltd (ASX: BIG) – currently suspended from trading while its finances are investigated.
The ASX maintains "recently there has been a number of incidents" where disclosures about contractual arrangements with customers had "fallen short of required standards".
The ASX-imposed changes include the stipulation an announcement must contain "sufficient detail for investors or their professional advisers to understand its ramifications and to assess its impact on the price or value of the entity's securities".
The customer's name, contract term and any conditions of the contract will also have to be included with the ASX warning it would "not hesitate" to suspend entities who issued "inadequate or misleading" disclosures.
