ASIC consults to improve flexibility around pre-IPO comms

ASIC has released a proposal to provide companies greater flexibility when listing on the public market to publicise their upcoming initial public offering (IPO).

Under existing laws, companies are generally prohibited from advertising or publicising offers that require a disclosure document to prevent selective information being drip-fed to the market, discourage inadequate analysis and to ensure investors base their decisions on the disclosure document rather than advertising or other publicity.

ASIC's changes aim to modernise and simplify the pre-lodgement advertising framework for IPOs. It hopes to bring the rules in line with comparable international jurisdictions and allow offerors to communicate in a controlled and accountable way.

The regulator noted it will help companies gauge market interest, improve information quality and enable timely clarification or corrections.

However, it will maintain core investor safeguards by reinforcing the prospectus as the primary disclosure document for investment decisions.

ASIC commissioner Simone Constant said: "These proposals strike the right balance between supporting capital raising in our public markets and protecting investors."

"They narrow an unnecessary part of the gap between capital raising rules in public and private markets, giving companies more flexibility in communicating with investors and the market. At the same time, they maintain robust safeguards and reinforce the central role of the prospectus as a key disclosure document."

Court added by getting the balance right, ASIC can encourage market participation while ensuring investors have access to clear, reliable and timely information before making investment decisions.

"This proposal is another initiative that promotes Australia's public markets as attractive for new listings," Court said.

"In this new financial year, we will keep working through the list of new ways we have identified to narrow unnecessary gaps between public and private markets and make sensible changes that promote thriving and fair Australian public and private markets which are an attractive destination for investment and innovation. This is about helping Australia - which is a nation of investors - to be as great a place to invest as it can be."

Companies could advertise unquoted securities as long as they identify the issuer and the seller of the security, ensure a prospectus is made available by the time a security is listed, make it clear where and when a prospectus will be made available and direct investors to the disclosure document as the key source of information before making an investment decision.

ASIC is seeking feedback on its proposal by September 11.