ASIC announces 2-year trial of fast-track IPOs

The Australian Securities and Investments Commission (ASIC) has reflected the degree to which it has taken on stakeholder feedback by announcing a two-year trail of a fast-track approach to initial public offerings (IPOs).

The fast-track approach has grown out of responses to the regulator’s discussion paper on the evolving dynamics between public and private markets, with ASIC chair, Joe Longo saying it has been developed in response to the decline in Australian IPOs and public companies.

Under the new arrangements, ASIC will informally review eligible offer documents two weeks prior to public lodgement, which could reduce the IPO timetable by up to a week.

Its announcement said 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.

The changes also include a ‘no action’ position by ASIC that now allows eligible companies to accept retail investor applications during the public exposure period for new listings, cutting down the administrative timeline of the IPO process.

“Creating a more streamlined IPO process underscores our commitment to ensuring our public markets remain attractive to companies and investors.

“Greater deal certainty for companies should help deliver more IPOs, which means more investment opportunities so companies can expand, increase jobs and ultimately economic growth.

“Our initial public offerings are the lowest they have been in over a decade, and companies are de-listing. Meanwhile, our secondary capital raising settings continue to be globally recognised for their speed and efficiency,” Longo said.

“Earlier this year, we outlined our concerns for the future of public markets and called for actionable ideas to ensure our markets remain open, efficient and attractive to investors. I’m proud of how quickly we’ve been able to work with industry participants and mobilise our teams to respond to actionable ideas.

“While we do not see regulatory settings as the silver bullet, we have received lots of ideas and are considering further regulatory adjustments to support a strong and well-functioning market,” Longo said.

ASIC said the changes still allow for concerns to be raised during the public exposure period and the issue of shares and quotation will still only occur once the exposure period has ended.