EMC Limited Essay

The question is active whether EMC Limited should disclose to the ASX that it is currently having private discussions with Elco Ltd about a practical merger. I do not think that it is required to disclose.ContextThe ASX has issued steerage Note 8 Continuous Disclosure regime and indicated in direct 3.1 that listed companies must immediately notify ASX of any knowledge which may break a material resolution on the price or take to be of the entitys shares or affect investment decisions, and information in which shareholders, investors and ASX work a legitimate interest. This regime also has statutory backing in Section 674, 675 and 677 of Corporations Act. The objectives of this regime are to provide timely information and graceful access to information for market participants. When considering whether a disclosure is required or not, the companies need to Identify whether the information to have a material effect on the price or value of the entitys shares Decide whether th e information would affect investment decisions Consider whether the ASX and shareholders have a legitimate interest. If the companies unwrap that the answer to totally these questions is Yes then they need to further consider whether 1. A reasonable person would not expect the information to be break 2. The information is confidential3. One or more of the following appliesIt would be a breach of law to discloseThe information includes an incomplete designThe information is insufficiently definiteThe information is foe internal care purposeThe information is a trade secretIf the answer to all these three questions is Yes then a disclosure is not required to be made.ArgumentIn this case, this potential merger would probably have a material effect on the price or value of the entitys shares and affect investment decisions.