EMC Limited Essay

The question is about whether EMC Limited should disclose to the ASX that it is currently having private discussions with Elco Ltd about a viable unification. I do not think that it is required to disclose.ContextThe ASX has issued Guidance Note 8 persisting Disclosure regime and indicated in Rule 3.1 that listed companies must immediately notify ASX of any cultivation which may move over a material effect on the price or value of the entitys shares or affect investment decisions, and information in which shareholders, investors and ASX have 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 fair gate 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 the information would affect investment decisions Consider whether the ASX and shareholders have a legitimate interest. If the companies find that the answer to all these questions is Yes wherefore they need to further consider whether 1. A reasonable person would not expect the information to be disclosed 2. The information is confidential3. One or more of the following appliesIt would be a respite of law to discloseThe information includes an incomplete proposalThe information is insufficiently definiteThe information is antagonist internal management purposeThe information is a trade secretIf the answer to all these third 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.