ABSTRACT

However, these membership provisions do not apply to Australian Stock Exchange (ASX) listed companies, which are governed by the ASX Listing Rules. On a practical level, it would be difficult for an individual company to be able to maintain its register of members in a highly liquid market. This is because the company’s shares are being bought and sold and the members may be changing as regularly as every minute. As a result, shares listed on the ASX are subject to the Clearing House Electronic Subregister System (known as CHESS). CHESS creates a ‘virtual ownership’, whereby traded shares are held on trust for a period of time, rather than the company having to issue share certificates upon every change in membership. Instead, a CHESS statement of their shareholdings, which they receive at regular intervals, updates the members as well as the company. Problems relating to the area of changes in share ownership were discussed in the complex case of Kokotovich Construction Pty Ltd v Wallington (1995). Listing rules are legally enforceable by s 793C. After 11 March 2002, business rules and listing rules for stock exchanges became collectively known as ‘operating rules’ under Chapter 7 of the CA.