ASIC Plans to Simplify Process for Firms to Join ASX

In a move aimed at encouraging more Initial Public Offerings (IPOs), the Australian Securities and Investments Commission (ASIC) said that it was initiating a two-year trial to simplify the process of joining the Australian Securities Exchange (ASX) and further activate the domestic IPO market.

This move will expedite listing timelines by allowing ASIC to informally review IPO documents two weeks before formal lodgement, potentially reducing the overall timeline by a week. This initiative, which was proposed confidentially by a group of investment banks including JPMorgan, seeks to reduce deal execution and market volatility risk associated with IPOs before the company’s shares begin trading.

The announcement comes in the wake of companies such as Virgin Australia and $1.3 billion land lease develop GemLife, which have announced listing of their shares on ASX, indicating that the IPO market was showing signs of recovery.

It may be mentioned here that the Australian IPOs year-to-date total only $122 million, far below the $301 million recorded at the same time in 2024, according to data from Dealogic.

 In other words, 2025 proved to be a lean year and is the lowest year-to-date tally since the start of the COVID-19 pandemic five years ago. There were only high-profile listings last year, one each by Mexican-themed restaurant chain Guzman y Gomez and data centre owner DigiCo Infrastructure.

ASIC’s trial also intends to allow companies to accept retail investor applications earlier in the process, which could permanently change how ASIC oversees the Corporations Act.

The regulator is considering further changes, including engaging with the ASX on managing dual listings, to encourage companies like Atlassian and Canva to consider Australian IPOs. These reforms follow similar initiatives in other markets, including the US and the UK.

According to a report in Australian Financial Review, the IPO trial is part of ASIC’s response to a landmark review that delved into the declining number of new Australian listings while private capital and investments have thrived over the past decade. In the decade to December 31, the number of listed entities in Australia fell from 2073 to 1989.

ASIC’s trial also includes a measure to reduce the IPO timeline by allowing companies to accept retail investor applications earlier during the process. If successful, it could prompt a permanent change in how ASIC oversees and enforces the Corporations Act.

ASIC flagged plans to announce a detailed response to challenges in public markets later this year. That may lead to more dramatic changes to rules that govern share market listings and entice home-grown companies like software giants Atlassian, which is listed in New York, and Canva, which is considering floating on the Nasdaq, to consider an Australian IPO.

Receiving Feedback

ASIC Chairman Joe Longo said that while they do not see regulatory settings as the silver bullet, they have received lots of ideas and are considering further regulatory adjustments to support a strong and well-functioning market.

“Greater deal certainty for companies should help deliver more IPOs, which means more investment opportunities so companies can expand, increase jobs and ultimately bring economic growth,” he added.

A string of regulators offshore – including in the US, the UK, the European Union, Canada, Hong Kong and New Zealand – have already introduced reforms and rule changes to address similar IPO issues within their own markets in recent years, the report said.

The shrinking of public markets has not been limited to Australia. In the US and the UK, the number of listed companies has halved since the turn of the century. While the number of companies listed in the US has recently begun to grow, it continued to decline in the UK.

By starting with a two-year trial, ASIC can assess how the measures are working before seeking legislative change from Treasury. The proposed timeline sees the period the IPO is deemed at risk condensed to two and a half weeks compared to three and a half weeks.