Discuss about the Listing Rules and Role of Australians Security and Investment Commission.
Communication and leadership are the key factors for running a business effectively. Businessmen have to incorporate a legal entity to run their business in determined approach. Companies have to get their shares listed on stock exchange in order to raise capital from the general public over the time with the increasing ramification of economic working conditions. Leadership and communication are two aspects which are required to be absorbed by top management for proper business functioning. However, communication skills are the sub part of leadership. In this report various communication and leadership intents have been taken into consideration for business functioning of organization. In the starting of this report investigation and procedure to incorporate small propriety company have been discussed. Afterward, role of Australian security exchange in society has been evaluated. Then listing rules and regulations that are applicable in Australian company have been read with corporate laws. In the end, the most imperative factor of role played by Australian security and investment commission for regulating the behavior of companies in their business functioning are discussed. A leader of organization has to evaluate all the laws and regulation in order to avoid possible penalties (Kang & Gray, 2013).
Investigate the procedure and framework which is required to be followed under the corporation Act 2001 to incorporate small proprietary company.
In Australia, a proprietary company is defined under section 45(1) of the corporation act 2001. This is a company which satisfies following two conditions subject to the otherwise provided in the corporation act 2001. This company is ideally incorporated with a view to start a business with separate legal entity. However, businessman chooses to incorporate small propriety company when he wants to start new business with low capital and with less complexity in his business functioning (Dwyer & Kotey, 2015).
There are two options to incorporate a small proprietary company as per corporation act 2001. First we can contact private services providers or lodge a paper directly with AISC. In the second option a form- 201- (application for registration of company) would be filled and lodge it with Australian security and investment commission. Then ASIC will give ACN number accompanied with certificate of registration which will be unique to small proprietary company. However, while incorporation of small proprietary company businessmen needs to follow all the guidelines given in information sheet 1 (INFO 61).
Society is accompanied with stakeholders of the company. Role of stock exchange are varied and highly important for the economic development of country. Australian stock exchange is an Australian public company that operates Australian stock exchange where all the shares of listed Australian companies are listed. The Australian security and investment commission have responsibility for the supervision for the real time trading of Australian domestic licensed markets (Daneshgar & Wang, 2007).
The fundamental role of ASX is to provide an effective way for the business man to raise capital form the market. However, ASX works for the best interest of the investors and protect their rights from unethical behavior of organizations. Ideally ASX assists investors to buy and sell their securities and scriptures in secondary market so that they could increase the value of their investment. The main role of ASX is to list the securities of the companies and provide a proper surveillance of the listed company. It also facilities secondary market for the investors to buy and sell the securities issued by the listed company. In addition, ASX imposes straighten rules for the companies to get their shares listed on exchanges which ultimately results into better corporate governance simultaneously. It has also observed that Australian stock exchange provides stock indexes which could be used as true indicators for the economic growth of Australian economy. Australian stock exchange is main body to manage risk of market to curb insider trading (buying and selling of shares with the help of confidential information). In simple words it would be said that Australian stock exchange provides a bridge to investors and companies to contact each other. Priority is established to provide all the possible safeguards to protect the best interest of investors (Chiappini, 2011).
ASX regulates the offers of securities by companies in Australia and certain associated matters such as trading of securities, insider trading, market misconduct and pre prospectus advertisement. In addition to this, ASX issues various listing rules and regulation which assists in better corporate governance of the company on continues basis. The listing rules set out the specific requirements that an organizations has to meet to make effective compliance in their business functioning. As per the Australian listing rules, company must satisfy minimum admission criteria including structuring and number of employees given as below to be eligible to list on ASX, (Bessler, et., al., 2012).
The Companies which want to list their security has to maintain 400 employees and $ 2000 and unrelated party would hold 50 % of security. In case of company which is already listed on a foreign exchange can list on ASX. In this case the listing requirement of ASX would be followed by the company and foreign listing rules will be exempted. Those companies which are about to come up with Initial public offer in the market are tend to list their shares on stock exchange. However, there are following advisors who will help companies to list their shares listed on exchange (Wilkinson, 2014).
Each listed companies must notify ASX immediately for their shares listed after complying all the listing rules and regulations. Once company gets its shares listed on the stock exchange then it has to comply with the entire listing discourse requirement on the consistent basis. In addition, ASX also resolves all the possible grievances and problems of employees in effective manner. (Lewis, 2014).
Financial reporting is required on a half yearly and annual basis in Australia. However, companies without track record need to file quarterly cash flow statement. It is also observed that mining and Oil companies are required to file quarterly reports on their activities of investment with the ASX stock exchange (Charest, et., al., 2014).
In case of Dual listing problem of company it would be observed that company should comply with both rules if shares are issued on domestic and international level as well. However, in case of issue of shares in Australia, company only needs to comply with Australian listing rules and regulations.
ASX also requires listed companies to take shareholders’ approval in their annual general meeting before issue of shares in the general public (Andersen & Tourani, 2013).
In addition to this, company has to comply with the entire listing requirement such as having minimum capital requirement, minimum number of employee’s partition of unrelated party investment in share capital of the company.
It is an independent Australian government body that act as Australian’s corporate regulators. The main role of Australian security and investment commission is to regulate and enforce all the laws and regulation on the registered company in order to protect Australian consumers, investors and other creditors in effective manner. The main aim of ASIC is to promote efficiency, honesty and fair business functioning of companies in Australia. It is also known as financial service regulator for the wellbeing of Australia’s economic reputation and ensuring that Australian security and financial market are providing true and transparent values to its investors.
Australian security and investment commission is also responsible for the supervision of operators of financial markets, operators of clearing and settlement facilities of market participants.
Australian security and investment commission undertakes all the regulatory enforcement powers, issue licenses and monitors ethical working conditions of companies. It ensures that promoters and management department of companies are providing effective business operation to their clients through the Australian financial services licensing system which includes (Guseva, 2013).
Ideally Australian security and investment commission is concerned with protecting the interest of investors, creditors and clients from the business functioning of organization in the market. It is observed that if company holds the license issued by the Australian security and investment commission then it would be considered as highly ethical company in terms of its offering (McGrath, 2013).
The commission that governs ASIC is comprised of chairperson, deputy chairpersons and between one and six other members. It meets on monthly basis to discuss all the required matters on the financial services provided by the organizations in Australian market. However, it does not have set code of conduct for its functioning. The government expects that ASIC will comply with government regulatory impact analysis requirement for regulatory proposals,
The Main role played by Australian security and investment commission
It has observed that Australian security and investment commission issues license which reflects that company is complying with all the required regulations and laws (with a view to increase the transparency in their business functioning). In addition, it contributes to Australian economic reputation and other wellbeing of people of Australia by ensuring that Australian’s financial market is reflecting all the true and fair view with the transparent policies and frameworks.
Conclusion
In this report there are various topics e.g. incorporation of small company, role played by Australian security and investment commission in Australian market and how legal framework related with the listing rules could be followed for the better transparency of organization. It is observed that the main purpose of Australian stock exchange is to protect the interest of investors and helps them to manage their marketing risk accordingly. Throughout the time with the increasing ramification Australian security and investment commission and other regulatory bodies have strengthen listing polices and laws for the better protection of interest of investors. Now in the end it would be said that companies which want to get their shares listed on stock exchange has to comply with all the listing rules and regulation otherwise it will has to face high amount of penalty.
References
Andersen, A., Gilbert, A. & Tourani-Rad, A. 2013, “Breach of continuous disclosure in Australia”, JASSA, , no. 4, pp. 21-26.
Bessler, W., Kaen, F.R., Kurmann, P. & Zimmermann, J. 2012, “The listing and delisting of German firms on NYSE and NASDAQ: Were there any benefits?”, Journal of International Financial Markets, Institutions and Money, vol. 22, no. 4, pp. 1024-1053.
Charest, G., Cosset, J., Marhfor, A. & M’Zali, B. 2014, “Financing constraints and US cross?listing”, Canadian Journal of Administrative Sciences / Revue Canadienne des Sciences de l’Administration, vol. 31, no. 3, pp. 160-174.
Daneshgar, F. & Wang, J. 2007, “Validation of the awareness net model for the Australian security investment processes”, Knowledge-Based Systems, vol. 20, no. 8, pp. 736-744.
Dwyer, B. & Kotey, B. 2015, “Financing SME Growth: The Role of the National Stock Exchange of Australia and Business Advisors: Financing SME Growth”, Australian Accounting Review, vol. 25, no. 2, pp. 114-123.
Guseva, Y. 2013, “Cross-listings and the new world of international capital: another look at the efficiency and extraterritoriality of securities law”, Georgetown Journal of International Law, vol. 44, no. 2, pp. 459.
Kang, H. & Gray, S.J. 2013, “Segment Reporting Practices in Australia: Has IFRS 8 Made a Difference?”, Australian Accounting Review, vol. 23, no. 3, pp. 232-243
Lewis, K. 2014, “ASX releases final version of listing rule changes”, Governance Directions, vol. 66, no. 6, pp. 329.
McGrath, M. 2013, “Guidance Note 8 Continuous Disclosure: Listing Rules 3.1-3.1B – any new challenges?”, Keeping Good Companies, vol. 65, no. 4, pp. 202-203.
Starr, M. 2011, “Regulating ASX – the regulation of listing, trading, clearing and settlement businesses”, Keeping Good Companies, vol. 63, no. 5, pp. 270.
Warren, K. & Dimovski, B. 2012, “The direct costs of raising equity capital by renounceable rights issues in Australia”, JASSA, , no. 2, pp. 14-19.
Wilkinson, S. 2014, “Key changes to proposed ASX listing rules”, Governance Directions, vol. 66, no. 4, pp. 223-225.
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