Director Trading Breach Clouds ABE’s Project Acacia Announcement Compliance
Australian Bond Exchange Holdings has responded to ASX queries confirming the material impact of its involvement in the RBA's Project Acacia and acknowledged a director's breach of trading rules during a closed period.
- ABE confirms Project Acacia participation as material market information
- Initial non-disclosure reassessed after related token price surge
- Director Mark O’Leary traded shares during a closed period without clearance
- Company admits incorrect disclosure on director trading timing
- Remedial actions include director training on trading policies
Context of the ASX Inquiry
Australian Bond Exchange Holdings Ltd (ASX – ABE) recently addressed an ASX Aware Letter concerning two critical disclosures – its July 15 announcement about participation in the Reserve Bank of Australia's (RBA) Project Acacia CBDC trial, and director Mark O’Leary’s share purchases reported on July 31. The ASX sought clarity on the timing and materiality of the Project Acacia information and compliance with the company’s trading policy.
Materiality Reassessment of Project Acacia Announcement
Initially, when ABE was informed of its selection as a lead participant in Project Acacia, the board did not consider this information to be material to the company’s share price. However, following a notable 30% increase in the token value of Redbelly Network, a co-lead participant in the project, ABE’s directors reassessed and concluded that a reasonable investor would expect the information to materially affect the company’s securities. This led to the July 15 market announcement, made in compliance with ASX Listing Rule 3.1.
Director Trading Breach and Disclosure Issues
The ASX also questioned ABE about director Mark O’Leary’s acquisition of shares during a closed trading period. ABE confirmed that Mr. O’Leary did not receive the required written clearance and that the company incorrectly reported the trades as occurring outside the closed period. The company acknowledged the breach of its Trading Policy and has since lodged updated disclosures reflecting additional trades made by Mr. O’Leary. No formal disciplinary action beyond a reminder and scheduled training has been announced.
Compliance and Forward Steps
Despite the trading breach, ABE asserts that its Trading Policy remains adequate and enforceable. The company has reiterated its commitment to continuous disclosure obligations under the ASX Listing Rules and confirmed that all responses to the ASX have been authorised by the board. Training for directors and staff is planned to reinforce compliance with trading restrictions.
Implications for Investors and Market Perception
ABE’s involvement in Project Acacia positions it at the forefront of tokenised asset markets, a sector attracting growing investor interest. However, the director trading breach and initial delay in recognising materiality may raise questions about governance and disclosure rigor. Market participants will be watching closely to see how ABE manages these compliance challenges while capitalising on its fintech innovations.
Bottom Line?
ABE’s next moves on governance and project execution will be pivotal for investor confidence and regulatory standing.
Questions in the middle?
- Will ABE impose further disciplinary measures on the director beyond training?
- How will market participants react to ABE’s reassessment of Project Acacia’s materiality?
- What impact will ABE’s role in Project Acacia have on its future growth and valuation?
