Survey reveals cost of maintaining an ASX listing
A new survey detailing the costs of maintaining a listing on the ASX reveals the annual cost can reach up to $65m for some companies.
Maintaining a public listing on Australia’s primary stock exchange costs companies up to $65m a year, according to a new survey, with director fees and investor-related staffing requirements making up more than a third of the overall cost.
The inaugural Cost of Being Listed survey, conducted by the Australasian Investor Relations Association (AIRA), reveals the median cost associated with being listed on the Australian Securities Exchange is $7.3m, and for individual companies ranges from $64.9m at the top end to $3.2m.
People costs - including director fees, investor relations and company secretarial staff costs, and C-suite time dedicated to investor relations activities - make up 39 per cent of the overall median cost, followed by audit and assurance requirements (24 per cent) and directors and officers (D&O) liability insurance (21 per cent).
Other costs included in the survey of ASX 300-listed companies include registry services costs, exchange fees, ASIC levies, shareholder reports and investor relations events and services.
The report says the demands on boards and executive leadership teams to deliver more complex and transparent reporting, including around sustainability activities, were likely to drive up staffing costs associated with meeting the requirements of a public listing.
“With the growing complexity of the laws and best practice for listed entities seemingly on an ever-increasing trajectory, we expect these costs to continue growing over time,” the report says.
“We do however, believe that investments in this area have many benefits, not only to individual issuers, but capital markets more broadly.
“The challenge remains in measuring the benefits associated with these expenditures in order to justify increasing budgets over time.”
More extensive reporting requirements and rising D&O premiums are expected to put added pressure on the overall cost of maintaining an ASX-listing.
The survey suggests the rise in class action lawsuits may be behind the recent increase in insurance costs, and is an area the AIRA says it will explore further, “particularly in an attempt to better understand how these costs may differ for listed and unlisted entities, why they are so significant and where they may be headed in the future”.
AIRA chief executive Ian Matheson said there was a growing need to monitor the cost of being a listed company in Australia.
“We believe this survey provides an important view of the ongoing costs of being listed and will contribute to public policy and regulatory discussions, he said.
By market capitalisation, median listing costs range from $8.8m for ASX 50 companies, rising to $9.8m (ASX 51-100), and then falling to $6.6m (ASX 101-200) and $4.4m (ASX 200-300).
According to the survey, the median cost associated with being listed on the New Zealand Stock Exchange (NZX) is $NZ6.6m ($6.1m).
The survey of NZX 30 companies shows ‘people’ costs make up 47 per cent of the overall cost, followed by D&O (20 per cent) and audit and assurance requirements (18 pe cent).
AIRA plans to conduct the survey every two years, providing a way for companies to benchmark their costs against peers.
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