NZX Regulation Decision
TruScreen Limited (“TRU”)
Waivers from NZX Main Board Listing Rules 5.1.1, 5.1.2(e), 5.1.2(i), 5.2.1, 5.2.2(b), 5.2.2(c), 5.2.2(d) and 5.2.2(f)
Rulings from NZX Main Board Listing Rules 3.3.3(a), 3.3.6, 3.3.10, 3.3.14, 3.3.15, 3.5.1, 6.1.1, 7.3.1(a), 7.3.3(c), 7.3.5, 7.3.6, 7.3.8, 7.3.9, 7.3.10, 7.6.1, 7.6.4, 7.6.5, 10.4.4, 10.4.5(g), 10.4.5(m), 10.4.8, 11.1.5, 11.2.2 and 11.2.4(b)
5 December 2018
Background
1. The information on which this decision is based is set out in Appendix One to this decision. These waivers will not apply if that information is not, or ceases to be, full and accurate in all material respects.
2. The Rules to which these decisions relate are set out in Appendices Two and Three.
3. Capitalised terms that are not defined in these decisions have the meanings given to them in the Rules, unless the terms are not defined in the Rules, in which case they shall have the meanings given to them in the NZAX Listing Rules as the context requires.
Waivers from Main Board Rules 5.1.1, 5.1.2(e), 5.1.2(i), 5.2.1, 5.2.2(b), 5.2.2(c), 5.2.2(d) and 5.2.2(f)
Decision
4. Subject to the conditions in paragraph 5 below, NZXR grants TRU waivers from:
a. Rules 5.1.1 and 5.2.1, to the extent that those Rules require that an applicant submitting an application for Listing and Quotation of a Class of Securities submit that application through a Primary Market Participant acting as an Organising Participant;
b. Rules 5.1.2(e), 5.1.2(i), 5.2.2(d) and 5.2.2(f) in their entirety;
c. Rule 5.2.2(b), to the extent that the Rule requires that an application for Quotation by an applicant under Rule 5.2.1 be submitted with evidence that the Primary Market Participant has sought assurance from NZX that Authority to Act has not been withdrawn in respect of Securities for which Quotation is sought; and
d. Rule 5.2.2(c), to the extent that the Rule requires a draft Offering Document, Prospectus or Profile to be provided in respect of any Securities then on issue for which Quotation is sought.
5. The waiver set out in paragraph 4 above is provided on the conditions that:
a. TRU makes an application for Listing and Quotation in accordance with the Rules as modified by the waivers granted; and
b. TRU makes no offer of a Class of Securities that is not Quoted on the NZAX together with the application for migration to the NZX Main Board.
Reasons
6. In coming to the decision to provide the waivers set out in paragraph 4 above, NZXR has considered that:
a. Rules 5.1.1, 5.2.1 and 5.2.2(b) generally require that new Listings and Quotations are made through a Primary Market Participant, in order to help new Issuers prepare for Listing and Quotation and assist Issuers with any public offer being made. The granting of this waiver will not offend the policy behind Rule 5.1.1, 5.2.1 and 5.2.2(b);
e. TRU is already Listed, with its shares Quoted on the NZAX and seeks to migrate the Quotation of its shares to the NZX Main Board. There will be no public offer of a new Class of Securities associated with the Migration;
f. imposing the requirement that the application for Listing and Quotation be submitted through a Primary Market Participant would provide no benefit to the TRU’s security holders, the market as a whole, or NZX;
g. the matters set out in Rules 5.1.2(i), 5.2.2(c), 5.2.2(d) and 5.2.2(f) are largely administrative in the context of a migration and therefore enforcing these requirements would provide no benefit to the TRU’s security holders, the market as a whole, or NZX; and
h. there is precedent for this decision.
Waiver from Main Board Listing Rule 3.1.1
Decision
7. Subject to the conditions set out in paragraph 8 below, NZXR grants TRU a waiver from Rule 3.1.1, to the extent that that Rule would require TRU to have a Constitution which complies with the Rules from the time it Lists on the Main Board.
8. The waiver set out in paragraph 7 above is provided on the conditions that TRU provides to NZXR, with its application to List on the NZX Main Board, the following undertakings:
a. an undertaking to put a resolution to shareholders at its next scheduled annual meeting (or earlier, if a special meeting of shareholders is called (other than a meeting called by the Board following a request by shareholders pursuant to section 121(b) of the Companies Act 1993) prior to the scheduled annual meeting) to approve a Rules compliant Constitution; and
b. an undertaking that until a Rules compliant Constitution is adopted, TRU and its directors will comply with the Rules from the time TRU is Listed, as if the content requirements of Rule 3.1.1 were contained in the Constitution of TRU (Directors’ Undertaking Condition).
Reasons
9. In coming to the decision to provide the waiver set out in paragraph 7 above, NZXR has considered that:
c. the policy behind Rule 3.1.1 is to ensure that Constitutions of Issuers are consistent with the Rules. This consistency helps to reinforce the protections that the Rules provide shareholders, and it ensures that Issuers are not conflicted in complying with both the Rules and their Constitutions;
d. the Directors’ Undertaking Condition provides NZXR comfort that shareholders will not be disadvantaged by the Constitution of TRU not including the requirements set out in Rule 3.1.1, and its protections will resemble the requirement for a Constitution to be consistent with the Rules;
e. TRU will be required to enter into, and be bound by, a Listing agreement with NZX. In accordance with the Listing agreement, TRU will be required to comply with all of its obligations under the Rules, upon Quotation of its Securities on the NZX Main Board;
f. in accordance with Rule 2.2.2, NZX will receive acknowledgements from each TRU Director, that they are aware that upon Listing, that TRU will be contractually bound to observe its obligations under the Listing agreement and the Rules, and that they will use their best endeavours to procure TRU’s compliance with the Rules;
g. the waiver is temporary, and will only apply until TRU’s next scheduled annual meeting (or next special meeting of shareholders, if such a meeting is called prior to the scheduled annual meeting (other than a meeting called by the Board following a request by shareholders pursuant to section 121(b) of the Companies Act 1993)); and
h. there is precedent for this decision.
Rulings in relation to Main Board Listing Rules as listed in Appendix Two
Decision
A number of Rules refer to matters done under other Rules, which means that TRU may not be able to comply with the Rules in respect of these matters, notwithstanding that the equivalent NZAX Listing Rules have been complied with. NZXR therefore grants a ruling that matters undertaken under certain NZAX Listing Rules as set out in the table in Appendix Two are deemed to have been undertaken under the equivalent Rules.
Appendix One
1. TruScreen Limited (TRU) is a Listed Issuer with ordinary shares (Shares) Quoted on the NZX Alternative Market (NZAX).
2. TRU has applied to NZX Regulation (NZXR) to migrate the Quotation of its Shares from the NZAX to the NZX Main Board (Migration). Upon completion of the Migration, TRU will be bound by the NZX Main Board Listing Rules (Rules).
3. On 28 November 2018, TRU released an announcement in respect of the Migration.
4. TRU intends to commence the quotation of its Shares on the NZX Main Board on 17 December 2018, subject to meeting all of NZXR’s requirements.
5. As TRU is already Listed, with its Shares Quoted on the NZAX, TRU proposes only to migrate the Listing and Quotation of its Shares from NZAX to the NZX Main Board. There is no public offer associated with the Migration.
6. As at 5 December 2018, TRU had a total of 882 Security holders.
7. NZXR considers that the waivers and the rulings adequately balance the interests of TRU, and the protections for its Security holders and, other than the waivers of the Rules granted in this decision, TRU will be required to fully comply with the Rules in all other respects.
Appendix Two
Please see attached for table.
Appendix Two
NZSX/ NZDX Listing Rules
Section 5: Listing and Quotation
Rule 5.1 Listing
5.1.1 Any person may apply to NZX for Listing either:
(a) with NZX as the Home Exchange; or
(b) with a Recognised Stock Exchange as the Home Exchange, if that person is domiciled or incorporated outside New Zealand and listed on a Recognised Stock Exchange (an “Overseas Listed Issuer”); or
(c) as a Dual Listed Issuer.
Application shall be made through a Primary Market Participant acting as Organising Participant.
5.1.2 The following information and material shall be submitted with an application under Rule 5.1.1:
[…]
(e) a copy of the applicant’s certificate of incorporation or commensurate document for the Issuer’s entity (if applicable); and
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(i) copies of annual reports for the last five years, if available; and
[…]
Rule 5.2 Quotation of Securities
5.2.1 An Issuer, or applicant for Listing, may apply to NZX for a Class or Classes of its Securities to be Quoted on the NZSX or NZDX. Separate application must be made for each Class of Securities, through a Primary Market Participant acting as Organising Participant, except that the application need not be made through an Organising Participant in the case of an application to Quote a Class of Securities where the Securities to be Quoted are rights to Securities that are already Quoted.
5.2.2 The following information and material shall be submitted with an application under Rule 5.2.1:
[…]
(b) evidence that the Primary Market Participant has sought assurance from NZX that Authority to Act has not been withdrawn in respect of Securities for which Quotation is sought or a certificate is provided under Rule 7.4 of the NZX Participant Rules (whichever is applicable); and
(c) a draft Offering Document, Prospectus, or Profile in respect of the Securities (which shall include, without limiting any other provision of the Rules, the timetable required by Rule 7.1.5(b)); and
(d) any Advertisement that is proposed to be issued before the date of Quotation in respect of the Securities; and
[…]
(f) details of proposed arrangements to ensure that persons subscribing for the Securities in the offer have an opportunity to trade on Quotation of the Securities.