ASX outlines opportunities in listed markets amid IPO slump

In response to a discussion paper published by the Australian Securities and Investments Commission (ASIC) in February, the Australian Securities Exchange (ASX) has outlined several opportunities to spike "global competitiveness" of Australia's listed markets.

ASIC's Australia's evolving capital markets paper noted that although the value of listed entities has doubled over the past decade ($1.58 trillion in 2014 compared to $3.01 trillion in 2024), the market regulator has several concerns, including the recent decline in initial public offerings (IPOs).

Over the past year, the number of IPOs has plummeted, decreasing by nearly 100 listings.

The exchange also lost over $40 billion from some 78 companies leaving the ASX in the 12 months to December 2024.

Responding to the issues raised, the ASX called for a streamlined IPO process by reducing the regulated 'on-risk' period, clarifying regulation around financial forecasts in prospectuses, and reducing the required minimum level of 'free float' for new listings to attract more founder-led companies.

The proposal also suggested a more efficient and accessible corporate bond market for better flexibility and the adjustment of size thresholds for foreign exempt listings.

Further, the ASX is advocating for consideration of dual class share structures in Australian public markets, which aims to mirror similar moves in the UK, Singapore, China and Hong Kong.

"ASX has also recommended further discussion and evaluation of new frameworks to enable more orderly and transparent on-market sell downs by founders," it said.

ASX general manager of listings James Posnett reiterated the listed market remains crucial to the Australian economy and should be tended to with urgency.

"They [the listed markets] provide access to growth capital for our businesses and support the democratisation of wealth creation by opening access to investment opportunities for all types of investors," Posnett said.

"Global competition for new listings has accelerated and while we believe ASX listings will recover from the recent slowdown in the global IPO market, it is an appropriate time to publicly debate how to improve the attractiveness of Australia's listed markets."