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ASX Market Rules Guidance Note 34 - Designation of Approved Short

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					                                         ASX Market Rules
                                     Guidance Note No. 34

KEY TOPICS            DESIGNATION OF APPROVED SHORT SALE
1. Designation of
                      PRODUCTS AND APPROVED SHORT SALE ETFs
   Approved Short
   Sale Products
                      Purpose
2. Designation of
   Approved Short     The purpose of this Guidance Note is to provide clarity to
   Sale ETFs          Market Participants (“Participants”) in understanding ASX’s
                      approach to the addition and removal of Cash Market Products
                      and ETF Securities to or from the list of Approved Short Sale
ASX Market            Products and Approved Short Sale ETFs respectively.
Rules
1. 19.7               The Rules set out criteria for addition of Cash Market Products
                      and ETF Securities to the list of Approved Short Sale Products
                      and Approved Short Sale ETFs. The Rules allow for ASX from
Cross-                time to time to change its list of Approved Short Sale Products
reference             and Approved Short Sale ETFs.
1. s1020B(4)(e)       This Guidance Note provides guidance on:
   Corporations Act
                      •      the way in which ASX will approach exercise of its
                             discretion in adding Cash Market Products and ETF
                             Securities to the list of Approved Short Sale Products and
                             Approved Short Sale ETFs; and
                      •      the way in which ASX will approach exercise of its
                             discretion to remove Cash Market Products and ETF
                             Securities from the list of Approved Short Sale Products
                             and Approved Short Sale ETFs.
Guidance Note
History               Background
Issued: 14 May 2007   The Rules set out the criteria for addition of Cash Market
                      Products to the list of Approved Short Sale Products and
                      Approved Short Sale ETFs as follows:

                      ASX may designate a Cash Market Product to be an Approved
                      Short Sale Product if:
                      (a)      50 million Cash Market Products of the class have been
                      issued (excluding Cash Market Products of the class issued but held
                      by any entity which ASX considers is related to the Issuer);

                      (b)      the market capitalisation of the Cash Market Products of
                      the class on issue is not less than $100 million;


                          GN 34 – Designation of Approved Short Sale Products
                          14 May 2007                                           Page 1 of 3
(c)       in the opinion of ASX there is sufficient liquidity in the market for the Cash Market
          Products of the class; and

(d)       ASX considers that the Cash Market Products should be designated as an “Approved
          Short Sale Product” for the purposes of these Rules.


In general, ASX will consider 7.5% volume based liquidity in the preceding three months to be
“sufficient’ liquidity for the purposes of the Rules. ASX may form the opinion that a lower level
of volume based liquidity is sufficient in particular circumstances. ASX may however also form
the opinion that a higher level of liquidity is required in particular circumstances.

ASX may also form the opinion, prior to the commencement of Official Quotation of a class of
Cash Market Products, that there will be sufficient liquidity in the market upon commencement
of Official Quotation and the other criteria are satisfied and designate the Cash Market
Products as Approved Short Sale Products accordingly.

Although Cash Market Products include Warrants admitted to trading status by ASX, ASX does
not consider that such Warrants should be designated as Approved Short Sale Products.

The Rules set out the criteria for addition of ETF Securities to the list of Approved Short Sale
Products and Approved Short Sale ETFs as follows:

ASX may designate an ETF to be an Approved Short Sale ETF if:

(a)       the ETF Securities are in a class of ETF Securities which are quoted on ASX; and

(b)       ASX considers that the ETF should be designated as an “Approved Short Sale ETF” for
          the purposes of these Rules.

In general, ASX considers that ‘classical’ ETFs which mirror an index and utilise a continuous
in-specie issue and redemption facility and for which there is sufficient liquidity in the market
for the Cash Market Products underlying the ETF, may be designated as “Approved Short Sale
ETFs”.



ASX will consider removing a Cash Market Product from the list of Approved Short Sale
Products and Approved Short Sale ETFs if:
(a)       less than 50 million Cash Market Products of the class are on issue (excluding Cash
          Market Products of the class issued but held by any entity which ASX considers is
          related to the Issuer);

(b)       the market capitalisation of the Cash Market Products of the class on issue is less
          than $75 million and volume based liquidity is less than 5% in the preceding three
          months;


                                 GN 34 – Designation of Approved Short Sale Products
                                 14 May 2007                                            Page 2 of 3
(c)       the market capitalisation of the Cash Market Products of the class on issue is less
          than $50 million and volume based liquidity is less than 6.25% in the preceding three
          months; or

(d)       ASX otherwise considers that the Cash Market Products should be removed from the
          list of Approved Short Sale Products and Approved Short Sale ETFs for the purposes
          of the Rules.



ASX will consider removing an ETF Security from the list of Approved Short Sale Products and
Approved Short Sale ETFs if:
(a)       it ceases to mirror an index and utilise a continuous in-specie issue and redemption
          facility;

(b)       there ceases to be sufficient liquidity in the market for the Cash Market Products
          underlying the ETF; or

(c)       ASX otherwise considers that the ETF Securities should be removed from the list of
          Approved Short Sale Products and Approved Short Sale ETFs for the purposes of the
          Rules.

ASX may nevertheless form the opinion that despite a Cash Market Product or ETF Security
falling within the above circumstances it is appropriate for the Cash Market Product or ETF
Security to remain on the list of Approved Short Sale Products and Approved Short Sale ETFs,
including if it underlies an existing Derivatives Market Contract.

An up-to-date list of Approved Short Sale Products and Approved Short Sale ETFs is available
at asxonline at <http://www.asxonline.com/infolink/index.htm> or
<https://www.asxonline.com/participants/index.html> and on the ASX website asx.com.au at
<http://www.asx.com.au/investor/education/basics/short_sales.htm>.




Qualification

ASX has published this note to promote commercial certainty, and assist Market Participants.
Nothing in this note necessarily binds ASX in the application of the Rules in a particular case.
In issuing this note ASX is not providing legal advice and Market Participants should obtain
their own advice from a qualified professional person in respect of their obligations. ASX may
replace this Guidance Note at any time without further express notice to any particular person.
Readers should contact ASX to ensure they have the latest version.




                                 GN 34 – Designation of Approved Short Sale Products
                                 14 May 2007                                           Page 3 of 3

				
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