Faster IPOs on the horizon: ASIC launches two-year fast-track listing trial

The Australian Securities and Investments Commission (ASIC) has announced a two-year trial program to accelerate the IPO process for eligible companies listing on the ASX. The trial is effective immediately. The trial announcement follows ASIC receiving more than 50 submissions in response to its recent discussion paper on the evolving dynamics between public and private markets which discussed ASIC's concerns for the future of public markets and called for actionable ideas to ensure Australian markets remain open, efficient and attractive to investors.

The key takeaways of the fast-track listing trial

The new fast track process is available to companies with a projected market capitalisation above $100 million and no ASX-imposed escrow. The new process is intended to:

• reduce the IPO timetable by up to a week,

• deliver greater deal certainty and, ASIC hopes, will deliver more IPOs, and

• ensure retail investors will no longer need to wait until after the exposure period (a 7 day period after prospectus lodgement which may be extended by ASIC) to apply for securities in eligible IPOs.

ASIC's Chair, Joe Longo, has also announced that ASIC is considering further regulatory adjustments to support a strong and well-functioning market.

What is changing for IPOs now?

Market feedback identified the length of the "on risk" period (being the period from when the IPO is priced in a bookbuild process and the final prospectus is lodged with ASIC until the issuer is listed on the ASX) as a key challenge for both potential issuers and investors – particularly in the Australian market which often favours the front-end bookbuild offer structure (where institutional investor commitments are sought on the basis of a draft "pathfinder" prospectus and prior to formal prospectus lodgement).

The length of the "on risk" period is determined by two key regulatory processes: the ASX listing application process and the ASIC review and exposure period.

ASIC’s two-year trial involves two core changes: (i) the introduction of a pre-lodgement informal review process (aimed to reduce the likelihood that ASIC will extend the statutory seven day exposure period) and (ii) confirming a "no action" position if applications are accepted during the exposure period.

ASIC states "the changes mean ASIC will engage with an issuer prior to the exposure period, which decreases the need for supplementary and replacement documents and extensions to the exposure period. This also reduces the risk that market volatility and consequential pricing changes may impact investor interest in the IPO."

Pre-lodgement informal review process

Currently, companies can seek to list on the ASX through a "standard" or "fast track" process. To be eligible for a fast track listing, companies must have a market capitalisation greater than $100 million upon listing and no ASX imposed (mandatory) escrow (eg. companies listing under the profits test or which otherwise have a track record or profitability or revenue acceptable to the ASX).

Companies pursuing an ASX fast track process can submit to ASX a draft listing application and "pathfinder" prospectus (ie. an advanced draft that has not been lodged with ASIC and which does not contain certain information such as deal metrics) to enable the ASX to "front end" its review process. Whilst the ASX does not make a decision until final documents have been formally lodged with both the ASX and ASIC, this process allows the ASX assessment of the listing application following the lodgement of final documentation to be reduced from around four to six weeks for a standard listing to two weeks for a fast track process.

The proposed trial will introduce a similar informal early review process for ASIC.

Eligible companies may now submit a pathfinder prospectus to ASIC at least 14 days prior to formal lodgement. This confidential, non-binding review will allow ASIC to provide feedback before the formal exposure period begins, thereby reducing the likelihood that ASIC will need to extend the statutory seven day review period to 14 days. To qualify:

1. The entity must be eligible for the ASX Fast-Track application process;

2. The pathfinder must not differ materially from the final lodged version, except for pricing, offer size, or related financials; and

3. The pathfinder must be submitted to ASIC at: [email protected] at least 14 days prior to formal lodgement.

Importantly, ASIC retains its usual powers, including the ability to issue stop orders or intervene in the event of material changes or concerns arising before listing.

ASIC no-action position

ASIC has announced that it does not intend to take enforcement action where an issuer accepts an application from retail investors for IPO securities under a prospectus during the exposure period. This change simplifies the capital raising process by removing the need to wait for the exposure period to lapse.

ASIC has announced this relief applies only to offers made under Chapter 6D of the Corporations Act 2001 (Cth) and the no-action position does not protect issuers from third-party legal challenges or court findings.

ASIC reserves its right to withdraw the fast track trial or to withdraw or modify its "no action" position at any time during the process.

What else has ASIC said?

The trial is the first initiative announced after ASIC received more than 50 submissions in response to its discussion paper. ASIC has distilled the responses into a number of themes:

• Structural and cyclical market trends – Most conceded the decline in public markets is influenced by both structural and cyclical factors, with private markets growing as a significant global trend.

• Enhancing public markets – Suggestions to improve public markets include streamlining IPOs, simplifying governance and director responsibilities, amending listing rules. They particularly focused on adjustments which support and encourage companies to adopt longer term perspectives in a listed context. Stakeholders also requested ASIC look at the impact of ASX Corporate Governance Principles and whether regulations should be based on company size and sector, rather than listed/private status.

• Private markets are here to stay and grow, there is an acknowledgement of the need for any regulatory guidance to be measured, working closely with industry and aligning to international standards – Private markets were recognised as complementary to public markets, benefiting investors and issuers. There were calls for measured regulatory guidance, focusing on valuation, conflicts of interest, fee/risk disclosure, and fair treatment of investors. Concerns were also raised about retail investor exposure and there were suggestions to raise the wholesale investor threshold.

• Private credit is good for the economy and investors, if done well. There may be work to do to ensure it is sustainably done well – Private credit was seen as beneficial if managed sustainably, but its rapid growth and opacity warrant increased supervision. The industry is open to engaging with ASIC for consistent standards and practices.

• Superannuation is a mature investment force in Australia and a significant and structural influence in markets and investment – Submissions recognised that superannuation is a mature and influential force in Australia’s markets, with a focus on valuations, liquidity management, and retail investor protection. However respondents said retail investors have become exposed to the risks and opportunities of private markets and, as such, rely on good and clear disclosure about the investment strategies they may choose. There was appetite for more insight on what good looks like in terms of governance, disclosure and conduct practices. APRA's role in supervision of superannuation was also recognised.

• More to do on data collection and transparency of private markets including in dimensioning the market itself and learning from international practices – Submissions suggested that ASIC has underestimated the size of private markets in Australia. There was recognition that both the regulators and the market need more transparency to maximise efficiency, integrity and confidence, and to lead to greater participation and access. There were requests for consolidation and reconciliation of information already available to ASIC, APRA and other agencies.

What else might ASIC be looking at?

Joe Longo states that ASIC will "carefully consider the requests for urgency to improve the attractiveness of Australia’s public markets, as well as the caution expressed in submissions to move carefully in adjusting any settings in private markets" and that ASIC would share its roadmaps for public and private markets in Q3 and Q4, respectively, of 2025.

Possible actionable changes identified in the submissions (and current ASIC initiatives) included:

• Reducing regulatory accumulation – The AICD stated that its member engagement indicates regulatory accumulation is reducing the attractiveness of public markets and contributing to the decline in the number of well-qualified directors seeking roles on listed boards. This is consistent with feedback we heard. In 2025 Joe Longo established a regulatory Simplification Consultative Group.  The role of this group is to provide ASIC with fresh thinking and practical ideas to address key issues of regulatory complexity in areas of law administered by ASIC. ASIC will publish a discussion paper in the second half of 2025.

• Relationship between continuous disclosure regime and class actions – Both the AICD and the AGI submissions flagged concerns around the interplay between Australia’s stringent continuous disclosure obligations and facilitative class action settings which they considered are contributing to a decline in the number of well-qualified directors seeking roles on listed boards and instead opting for private company boards where they can have a greater focus on strategic, rather than compliance, matters.

• Facilitating a dual-class share structure – Allowing listings with classes of shares with different voting rights to address concerns (particularly in founder led-businesses) about short-termism. In its submissions, the ASX noted that Atlassian bosses Scott Farquhar and Mike Cannon-Brookes both cited the ASX’s opposition to dual-class structured companies as a reason they listed on the NASDAQ rather than the ASX. Both ASIC and the ASX would need to make policy changes to implement this proposal.

• Making financial forecasts optional – Whilst not strictly legally required, ASIC expects forecasts to be included. This raises concerns around strict regulatory requirements which require forecasts to be based on reasonable grounds (with serious legal consequences for any misleading or deceptive forecasts), detailed disclosure of underlying assumptions, litigation risk and audit and verification costs. ASIC would need to provide written clarification to implement any proposal to make financial forecasts optional.

• Facilitating founder sell-downs – Australia’s robust insider trading laws can mean insiders – particularly in high growth and accretive companies – are frequently unable to sell shares (even during designated trading windows) due to their continued access to inside information. The ASX advocated for exploring a US style mechanism which permits a trading plan for selling or buying a pre-determined number of securities at pre-determined times. This proposal would require changes to the Corporations Act, and any consequential changes to the ASX Listing Rules (subject to regulatory clearance by ASIC).

• Reducing the free float – The ASX Listing Rules require new listings to have a minimum free float (that is securities that can be publicly traded and are not restricted and/or held with insiders or strategic shareholders) of 20% ,which is higher than in some other global markets. The ASX proposes to consult on a reduction in the minimum free float to 15%. This proposal would require changes to the ASX Listing Rules and S&P/ASX Australian Indices Methodology (subject to regulatory clearance by ASIC).