“Time wounds all deals”

– Stephen A. Schwarzman, Co-Founder, Blackstone

Australia’s IPO market has been in decline over recent years, with new listings at the lowest levels in over a decade. In light of the decline in public capital markets, and the corresponding shift that we have seen towards private capital markets, ASIC has announced trial reform measures that it hopes will breathe some life back into Australia’s stagnant IPO market. ASIC’s reforms are aimed at accelerating the listing timeline for larger IPOs, with a view to reducing deal execution risk for market participants.

ASIC’s new early review process for Prospectuses

From 10 June 2025, ASIC is undertaking a two-year trial during which it will allow companies seeking to list on the ASX to submit a confidential pathfinder prospectus or product disclosure statement (Prospectus) prior to public lodgement for review by ASIC. By introducing this early review process, ASIC hopes to reduce an IPO timetable by up to one week and to reduce the need for companies to lodge supplementary or amended Prospectuses, which can create deal execution risk.

Entities that are eligible to participate in this early review process are those that will have a market capitalisation on listing of more than AUD100 million and no ASX-imposed escrow on their securities (Eligible Entities). Typically, ASX escrow is not imposed when entities list on the “profits test”, used where businesses have a track record of profitability.

Eligible entities may submit a pathfinder Prospectus to ASIC (Pathfinder), in the same material form as the final Prospectus that it intends to lodge in connection with its offer (other than with respect to final pricing, offer amount and related metrics / financial information and as otherwise agreed with ASIC), at least 14 days prior to formal lodgement. ASIC has advised that it will endeavour to complete its review of Pathfinders within this timeframe, unless new information arises or there are delays by the Eligible Entity, between ASIC’s review and public lodgement of the final prospectus.

Consistent with the approach that ASIC currently takes when reviewing Prospectuses during the exposure period, ASIC has stated that the review is not intended to provide an endorsement of the contents of the Pathfinder or to prevent any parties, including ASIC, from taking action in response to the formally lodged documents at a later point in time.

Early acceptance of retail investor applications

In connection with the early review process, ASIC has also adopted a “no-action” position regarding the early acceptance of retail investor applications for non-quoted securities by Eligible Entities during the 7-14 day exposure period. This means that Eligible Entities will no longer have to wait for ASIC’s exposure period to lapse before accepting applications from retail investors, which can take the momentum out of a deal.

Australia’s alignment with other jurisdictions

Internationally, other equity capital markets have begun introducing, or have already introduced, similar provisions to streamline the IPO process for their respective stock exchanges.

For example, in the United States a similar process was first introduced in 2017 and further expanded upon in early March this year. The US process allows companies to submit a confidential draft registration statement, which includes the prospectus, to the US Securities and Exchange Commission for review prior to officially filing the IPO documents.¹

Similarly, in the United Kingdom the Financial Conduct Authority (FCA) is responsible for reviewing a company’s draft prospectus prior to filing. The company may also submit an application seeking for the FCA to go beyond the initial review and approve the prospectus.²

What this means for entities intending to list in Australia?

Whether these trial measures will reinvigorate the Australian IPO market remains to be seen, particularly given the broader macroeconomic headwinds and global volatility that continue to weigh on equity capital markets. Nonetheless, ASIC’s introduction of this fast-track process should be welcomed as a constructive step by the regulator, aimed at streamlining the critical launch phase of an IPO and reducing deal execution risk, and bringing Australian market practices in line with those from overseas. While it may not be a silver bullet, it signals a willingness to support capital formation and improve market efficiency at a time when investor confidence remains fragile.

Entities intending to publicly list or conduct an IPO in Australia should consider whether they are Eligible Entities, that qualify for early review by ASIC when preparing a Prospectus. Importantly, entities should also note that ASIC has reserved its right to modify or withdraw the trial at any time during the two-year period depending on the effectiveness of the trial.

This article was written by Tom Morgan, Partner, Grant Hummel, Partner, and Brent Van Staden, Partner.

¹ SEC.gov | Enhanced Accommodations for Issuers Submitting Draft Registration Statements 
² PRR 3.1 Approval of prospectus – FCA Handbook