What are CDI’s?
The Australian Securities Exchange (“ASX”) uses an electronic system called CHESS for the clearance and settlement of trades on ASX.
Companies domiciled in certain jurisdictions, such as Canada, are unable to use CHESS directly for the transfer of securities. Therefore, in order to be able to use CHESS, Novo Resources Corp. (“Novo” or the “Company”) issues depositary interests known as CHESS Depositary Interests, commonly referred to as CDIs.
Each CDI represents a unit of beneficial interest in an underlying common share in Novo (“Share”). One CDI represents one Share.
CDIs are quoted and tradeable on the ASX. CDIs cannot be traded on the Toronto Stock Exchange (“TSX”) or OTCQX (a tier of the over-the-counter stock market of OTC Markets Group Inc.), unless first converted into Shares.
What is the difference between Shares and CDIs?
The main differences between holding Novo CDIs and holding Novo’s Shares directly is that:
- Novo’s CDIs are traded on the ASX in Australian dollars, while Novo’s Shares are listed and traded on the TSX in Canadian dollars and on the OTCQX in United States dollars; and
- holders of CDIs have beneficial ownership of the equivalent number of Shares instead of legal title.
Legal title to the relevant Novo Shares is held by a nominee company, CHESS Depositary Nominees Pty Ltd (“CDN”) on behalf of CDI holders. However, a Novo CDI has rights that are economically equivalent to the rights attaching to a Novo Share.
Please see the ASX publication “Understanding CHESS Depositary Interests” for more information on CDIs, how they operate and entitlements given to CDI holders, which is available at the following link
How do I trade my CDIs?
CDIs can be sold and purchased in a similar way to any other ASX security. We recommend seeking advice from your broker with regard to selling or purchasing CDIs as CDN will need to be informed of the change in beneficial ownership of the CDIs.
What is the process to convert Novo CDIs to Novo Shares?
Please refer to the information sheet “CDI Info” set out below, prepared by Olympia Trust Company, which contains details regarding the conversion process.
What code does Novo’s CDI trade under?
Novo is listed on the ASX under the ticker symbol ‘NVO’.
What dual listings mean for investors?
Novo’s securities are listed on three exchanges or platforms; ASX, TSX and OTCQX.
Trading on each of these exchanges is independent of the other exchange based on the securities assigned to that exchange e.g. ASX CDIs. In theory, the price of a dual-listed security should be approximately the same on different exchanges, after accounting for currency and transaction costs. In practice, there may be differences in the prices of the securities and market capitalisation mainly driven by market sentiment, reach and liquidity. However (and again, in theory) arbitraging between different exchanges should ensure that the spread between the prices of the securities on different exchanges is limited and that prices converge.
Listing on two or more exchanges exposes a company’s securities to a larger audience of potential buyers and sellers and can potentially lead to both higher liquidity in the company’s securities, and a company’s securities being included in different sharemarket indices.
The Company’s projects are based entirely in Australia. Therefore, the Company expects its ASX listing will expand the Company’s presence, and access to potential future capital, within Australia, being the jurisdiction of the Company’s exploration activities.
In the future, if the Company were to acquire or seek further opportunities, the Board considers the ASX exposure may provide a greater ability to facilitate such investment.
Who do I contact regarding my CDI or shareholding?
There are different registry details for Novo’s CDI holders and Novo’s shareholders.
Novo CDI Registry Contact Information
Managed in Australia by Link Market Services Limited
Australia Phone Number: +61 1300 554 474
International Phone Number: +61 1300 554 474
Postal address: Link Market Services, Locked Bag A14, Sydney South NSW 1235 Australia
If you are a CHESS Broker sponsored holder, please contact your broker for any queries related to the transfer of CDIs or updates to your name and address.
Novo Share Registry Contact Information
Managed in Canada by Olympia Trust Company.
Phone: +1 833 684 1546
Postal address: Olympia Trust Company, Attention: Corporate & Shareholder Services, PO Box 128 STN M, Calgary, Alberta T2P 2H6 Canada