ASX’s close review procedure: what triggers it, what it involves, and how to stay off the list

Under a procedure introduced with effect from 26 June 2025, ASX may place a listed entity under a close review period when it has serious concerns about the entity’s willingness or ability to comply with the disclosure-related listing rules. For six months, every announcement other than periodic reports and administrative notices is reviewed by ASX Compliance before release, and the commencement of the period is announced to the market against the entity’s code. For a small-cap that lives on announcement flow, the practical and reputational cost is severe. The procedure is intended to be used sparingly, which makes avoiding it entirely the only sensible objective.

The escalation ladder

Close review sits at the top of a graduated set of supervisory tools. Below it, ASX issues price query letters when abnormal trading is detected without an obvious explanation, and aware letters when it has concerns that market sensitive information was disclosed later than Listing Rule 3.1 required, both described in sections 8.3 and 8.4 of Guidance Note 8. ASX can also require an entity to review its compliance policies or engage an independent expert to do so, and can refer matters to ASIC. Close review is for the entity whose problems are serious and repeated rather than isolated.

What triggers it

ASX has identified the patterns that put an entity in the frame:

• announcements ASX required to be amended or withdrawn before release;
• clarifications, corrections or retractions of announcements already released;
• being advised of listing rule non-compliance across a series of announcements;
• failing to address disclosure issues ASX has raised; and
• being uncooperative or difficult to contact on disclosure matters.

Individually, any of these is survivable. A pattern of them is the trigger. Before initiating a close review period, ASX will write to the entity privately, outline its concerns and give the entity an opportunity to make submissions on the proposed course of action or to suggest an alternative. That letter is the last exit before the process becomes public, and it deserves a considered, board-level response, not a defensive one.

What the period involves

• Each announcement (other than periodic reports and administrative announcements) goes to ASX Compliance before release, is checked for listing rule compliance and consistency with ASX guidance, and is assessed for whether the entity has correctly characterised its likely market sensitivity.
• The additional review takes time. Entities under close review may need trading halts to accommodate the review of market sensitive announcements, compounding the disruption.
• ASX announces the commencement of the period against the entity’s code and may publish a list of entities under close review on its website. The status is a public signal to investors to scrutinise the entity’s announcements, though ASX is explicit that its review is not a representation that any announcement is accurate; responsibility stays with the entity.
• The standard period is six months, extendable where practices do not improve. If practices have not improved after more than 12 months, ASX is likely to move toward requiring the entity to show cause why it should not be removed from the official list under Listing Rule 17.12.

The broader tightening

The procedure arrived alongside other supervision changes that point the same direction. From 11 August 2025, disclosure became a standard condition of listing rule waivers: an entity must announce the nature and effect of a waiver and its reasons for seeking it, ordinarily within one business day of grant, and must submit a draft market statement with the waiver application, with deferral only for confidential and incomplete proposals. And during the August 2025 reporting season ASX signalled active monitoring of earnings surprises, issuing aware letters where results move a share price materially without prior guidance. The message across all of it: disclosure practices are being supervised more actively, and the file ASX builds from queries and aware letters is the file that supports a close review decision later.

Staying off the list

• Maintain a disclosure committee with board-delegated authority, able to convene at short notice, with a documented continuous disclosure policy that is actually followed.
• Treat every ASX query or aware letter as a compliance event: respond accurately, fix the underlying practice, and record what changed.
• Resist announcement inflation. Overstated headers and promotional drafting are what generate the forced amendments and retractions that build the pattern.
• Keep the Listing Rule 12.6 nominated contact current and responsive. Being hard to reach is itself on the trigger list.

How Luma Legal can help

We advise listed companies on continuous disclosure, respond to price queries and aware letters, and act for entities in remediation discussions with ASX Compliance. If your company has had more than one announcement corrected or queried this year, the time to fix the practice is before the private letter arrives.