Public and private markets: ASIC’s roadmap for Australia’s capital markets

Ahead of the Deal - Australian M&A Briefing

Key insights

• ASIC has released the report “Advancing Australia’s evolving capital markets: Discussion paper response report” (Report) which follows the February 2025 Discussion Paper on public and private markets and subsequent market consultation.
• The Report sets out ASIC’s proposed improvements to facilitate public markets and ways to introduce greater transparency and accountability in private markets.
• Some proposals will require legislative support (eg proposed changes impacting wholesale fund regulation) or engagement with other regulators (eg ASX and APRA). There are also areas where stakeholder concerns are noted but no immediate response is proposed (such as remuneration reporting and the two strikes framework).
• ASIC acknowledges the role of private credit and the contributions that can be made in this sector “if done well”, and outlines ASIC’s suggestions to uplift regulatory standards in private credit – noting in a separate report its concerns with the current state of the private credit market.

Introduction

The Report culminates a year of substantive engagement following ASIC’s February 2025 Discussion Paper, with nearly 100 stakeholder submissions, expert reports, forums and a dedicated symposium informing ASIC’s work.

The nature and scale of ASIC’s effort is unprecedented (ASIC has never before published a "Discussion Paper") and should be commended. The agenda is forward‑looking, recognising the structural shifts driving Australia’s capital markets, and identifying opportunities to strengthen foundations in public markets and to improve transparency and conduct in private markets.

Some proposals are beyond the scope of ASIC’s sole remit. Governance adjustments to remuneration reporting and the two strikes framework, for example, are matters requiring collaboration with government and/or ASX. Modernising the prospectus guidance and the policy on advertising and publicity (RG 228 and RG 254) will require market consultation. This means that many of the changes will take time to implement, but even so, the package is constructive and pragmatic, with the objective of easing bottlenecks in public markets and lifting standards and visibility in private markets.

Public markets – smoothing the path to listing

Easing IPO friction and improving prospectus disclosure

ASIC’s public markets agenda targets existing roadblocks, to make listing easier without compromising integrity.

The fast‑track IPO pilot (introduced in June 2025) shortens timetables for eligible ASX listings, and is here to stay. ASIC’s review of RG 228 is a welcome development to achieve purposeful prospectus disclosure (including forecasts) without compromise in overall access to information for retail investors.

ASIC has also indicated that it is open to reconsidering its ‘no action’ position on greenshoes in larger IPOs, noting however that it is not a near-term priority as it is likely relevant only to the largest IPOs.

Listing standards

ASIC is encouraging ASX consultation on adjustments that strengthen attractiveness and inclusiveness, including calibrating free float requirements, revisiting thresholds for foreign exempt listings, and exploring tailored pathways for smaller cap and growth entities. ASX has already signalled a proposal to lower the foreign‑exempt threshold from A$2 billion to A$500 million, and market feedback on free float settings is expected.

These changes depend on ASX engagement. ASIC’s current inquiry into ASX (report due by 31 March 2026) and its commitment to provider‑neutral (ie non-ASX specific) guidance and instruments by end‑2026 underpin confidence, competition and neutrality across infrastructure, including emerging tokenised solutions. ASIC has also approved Cboe Australia’s listing rules and expanded the approved foreign market list, supporting competition and choice for issuers and investors (noting Cboe has indicated its intention to divest its interest in Cboe Australia).

Publicity rules and research: modern settings for modern markets

Pre‑prospectus publicity restrictions have lagged the realities of today’s communications channels, and ASIC has proposed modernising the regulatory framework for advertising and publicity efforts. In parallel, ASIC will review its policy regarding sell‑side research to simplify settings, preserve independence and tighten conflict management (in part informed by international comparators and engagement with overseas regulators).

Governance and reporting considerations

It is encouraging to see ASIC accept that the Australian remuneration reporting standards, and the two-strikes framework, is burdensome even by global standards. On the two strikes rule, ASIC appears to support the broader policy context of investor say‑on‑pay while acknowledging practical concerns about distraction caused by shareholder activism. However, given any change in this regard requires legislative support, no immediate change can be expected.

ASIC has also noted that it is working with APRA to streamline the Financial Accountability Regime (FAR), to sharpen the focus on accountability and risk management rather than process, reducing administrative drag without weakening standards.

Private markets: transparency, supervision and targeted reform

The supervisory lens: where practices must lift

ASIC’s private markets work is principles‑based. The regulatory focus will be on transparency and surveillance rather than wholesale re‑regulation. ASIC's surveillance of retail and wholesale private credit funds, commenced last year, identified certain areas requiring immediate attention; in particular, lack of transparency in portfolio mix and reporting, aggressive marketing and distribution policies (including suitability and target market mismatches), and opaque fee structures (including borrower‑paid fees and retained margins) were identified as key concerns, sitting alongside the broader systemic concerns around weak governance and conflict management, valuation practices, and liquidity and credit risk frameworks.

Wholesale funds and managed investment schemes: measured enhancements

ASIC recommends enhancements to the managed investment schemes framework and wholesale settings, including:

• wholesale fund notifications so regulators know which funds exist;
• extending annual audited financial reports to the fund level for wholesale funds;
• timely significant event notifications (including redemption suspensions) to investors and ASIC; and
• potential imposition of statutory duties analogous to responsible entity duties for wholesale operators.

Several of these measures will require policy design and legislative support and are therefore not immediate.

Private credit: doing it well

ASIC acknowledges the growing role of private credit in debt capital markets, offering flexible funding for borrowers and diversification and yield options for investors.

However ASIC emphasises the importance of "doing [private credit] well", having conducted surveillance over 28 private credit funds from October 2024 to August 2025 and finding significant variance across these areas, with particular concerns about opacity, aggressive product distribution and lack of fee transparency (ASIC Report 820 "Private credit surveillance report: Retail and wholesale surveillance"). The risk, as ASIC has observed, impacts retail investors due to superannuation funds' exposure to these investment classes, also highlighting the need for trustees to ensure valuation integrity (and, as a related matter, liquidity).

From ASIC's perspective, "doing it well" requires a number of strong foundations to be established (the Report contains a detailed discussion of the principles underpinning what this should mean): transparent disclosures, clear and fair fees, robust governance and conflict management, consistent valuation methodologies, sound liquidity risk practices and disciplined credit risk management.

ASIC has indicated it will increase supervision and enforcement to lift standards in line with the principles in the Report. Fund operators and trustees will be expected to benchmark against these standards and uplift practices now. ASIC will refresh targeted guidance (including RG 181 on conflicts) with private markets‑specific examples and increase supervision and enforcement to deter misconduct.

Data and transparency: closing the blind spots in funds

ASIC has highlighted in the report significant gaps in private funds data relative to international peers, constraining visibility of conduct risks, market dynamics and system interconnections.

ASIC's response to these gaps is, overall, a collaborative way forward with a pilot in FY26–27 to calibrate proportionate, recurrent fund‑level reporting across retail and wholesale funds – with the objective of applying a “collect once” approach that is not unnecessarily burdensome and supports supervision, transparency and cross‑agency information‑sharing, with aggregated insights published to improve market understanding.

Superannuation

Noting recent failures in private market products offered through some superannuation channels, ASIC has identified weaknesses in valuation governance and liquidity risk management, prompting APRA and ASIC calls to lift standards. ASIC intends to focus on trustees’ duties in financial reporting and audits, investment disclosures, platform governance and market cleanliness, working with APRA to stress-test potential downside scenarios.

Practical implications

Boards and issuers should anticipate easier IPO execution and (in time – we would hope within the next 12 months) improved prospectus disclosure and hopefully a productive dialogue on streamlined governance and reporting standards.

Fund managers and trustees should assess practices against ASIC's private credit principles (outlined in the Report) immediately. In focus are valuation, governance, liquidity risk management, fee structures, conflict management and distribution conduct. ASIC will issue updated policies in these areas and, we suspect, continue surveillance efforts in private credit.

On the whole, the agenda is measured, realistic and pragmatic. Many proposals will take time to implement due to the range of stakeholders involved – whether the government, ASX, APRA or the market providing feedback via consultation papers.

We have set out below an overview and status of the various potential changes for Australian public and private markets.

However, in time, these developments should enhance Australia’s competitiveness, support confident participation across public and private markets, and lift standards where it matters most. The reforms appear to be headed in the right direction.

Status overview: potential changes for Australian public and private markets

Public markets: potential changes

Private markets: potential changes

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