What is a Speeding Ticket?

[MovieManiac]

Am fairly new to the market, have been reading the forum and see the occasional mention of speeding tickets, but can't seem to find any material on what a speeding ticket actually is, and wondering if someone can explain it to me (or link to some ASX material)?

From what I gather from doing a quick search in google, it's a notice asking the company to explain why the SP has increased so much in a short period of time (I got that from some news article [and also the thread on Reverse speeding ticket])? Are there any other implications of being issued a speeding ticket? What if the company cannot explain it?

 

[skcots]

Companies on the ASX have to announce price sensitive information. A sudden unusual jump/fall in share price would indicate that something has happened that should be made public.

Thats my understanding.

 

[MovieManiac]

Oh ok.. so it's more about prices moving about without having released any (price sensitive) announcements?

 

[KurwaJegoMac]

Companies on the ASX have to announce price sensitive information. A sudden unusual jump/fall in share price would indicate that something has happened that should be made public.

Thats my understanding.

Pretty much what skcots wrote. But just to elaborate a bit more, 'speeding ticket' is slang for when a company is issued with an 'ASX Price and Volume Query' which is given to a company whenever it has abnormally high trading volume or has had an abnormal change in share price.

What the query asks is the following general questions:

1. Is the company aware of any undisclosed information that could explain the recent trading activity. (if yes can an announcement be made, and if no, then why not and when can it be made)

2. Does the company have any other explanation for the abnormal trading activity

3. Confirm the company is complaint with ASX listing rules and regulations

The company is expected to respond to those queries very quickly, usually on the day of the 'speeding ticket'

 

[Sdajii]

What if the company cannot explain it?

Quite often (most often?) they can't (though sometimes they'll be lying; they're not exactly going to say "It's due to all my mates buying up on my hush hush advice" ). Generally it would be worse if they could explain it, because they should have notified ASX of the explanation before the speeding ticket was issued

 

[doogie_goes_off]

If the company can not reply satisfactorily to the ASX's concerns and will not state that it is in compliance with listing rule 3.1 (continous disclosure provisions), the ASX can suspend trading until it's resolved.

A good example of enforced suspensions is companies not meeting their quarterly reporing obligations (sometimes it's a sign of a dodgy company).