ASX goes public on markets reform call

The ASX wants to make it easier for companies to list — and stay listed — amid a surge in private companies and investments.

The ASX is backing a push for more publicly traded companies, as investment increasingly goes private. Picture: Jane Dempster

The Australian Securities Exchange is backing the corporate regulator’s push to simplify guidance and rules for listed companies, with a key executive noting support was building for a range of changes amid pressure from private alternatives.

ASX listings group executive Blair Beaton said the Australian Securities and Investments Commission’s recent foray into the ‘public versus private’ markets debate was welcome, noting the regulator’s report raised a number of “sensible” questions.

ASIC recently published a discussion paper looking at the rise of private markets and unlisted assets as well as the continued slide in the number of listed companies on public markets.

Mr Beaton said while both public and private markets had a role to play, work was needed to better support listed companies to ensure the ASX remained globally competitive.

He said the ASX was looking at whether to allow dual-class listed share structures, a form of listing often used by founder-led businesses to allow investor exposure without relinquishing control.

“The world has fundamentally changed since we did that last consultation,” he said.

Mr Beaton said much of this work was about ensuring the ASX remained “globally relevant” and the most attractive listings venue in the region.

ASIC’s report found the number of listed companies fell 4 per cent over the 10 years to 2024, with just 1989 listed equity issuers on the ASX last year.

Initial Public Offering levels have also tanked, down 82 per cent on levels 10 years ago, with just $4.2bn raised last year.

Mr Beaton said the ASX thought the decline in listings was “cyclical” rather than “structural”.

But, he noted work was needed to simplify the listings process, saying the ASX was working with ASIC and the financial sector “at the way we can do that”.

“The momentum and the mood is definitely shifting, bankers and lawyers are busy working on deals right now,” he said. “We’ll continue to be looking at what are the things we can do about trying to make the listing market an even more attractive market.”

The ASX wants to make it easier to list and stay listed. Picture: Gaye Gerard

Mr Beaton said the ASX was also looking to attract players from other listed markets, noting the market operator was competing against the NASDAQ and the TSX, both of which were also seeking to entice companies to list on their respective exchanges. “At the same time we’re competing against private capital,” he said.

Corrs Chambers Westgarth partner Sandy Mak said ASIC had a number of levers the regulator could pull to level the playing field for private and public companies.

“They can either regulate private more, or deregulate the public markets,” she said.

“I’m more of a fan of the deregulation of the public markets.”

Ms Mak, a mergers and acquisitions expert, said it was important to encourage investors to invest in a variety of asset classes, to ensure if “one thing goes wrong” there wasn’t disaster.

“Whatever we do with our regulatory settings it cannot be to put more handbrakes, it has to be to encourage growth,” she said.

Ms Mak said the Trump administration making noise about deregulating markets was likely to drive companies to US markets.

She said a key problem in Australia was the focus on chief executive pay.

“The REM of Australian CEOs is really scrutinised. It does drive behaviours,” she said. “Against that cultural setting if you make our regulatory settings tighter you’re discouraging domiciling on the Australian exchange.”

Ms Mak said the recent fight over the ASX Corporate Governance framework highlighted the need to question whether more disclosure was “accretive to our markets”.