This morning, the Australian Securities and Investments Commission (ASIC) published its highly anticipated discussion paper Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets (Discussion Paper). ASIC Chair Joe Longo described the Discussion Paper as one of ASIC’s most significant initiatives of the year.
The Discussion Paper:
outlines ASIC’s preliminary views of the key issues and risks
seeks to gather ‘actionable ideas’ for ASIC to consider
in relation to the operation and regulation of public and private markets.
The Discussion Paper is comprehensive and provides important insight into ASIC’s four key areas of regulatory focus and seeks input in relation to what ASIC sees as the key issues:
Healthy public markets
Noting the downturn in initial public offerings (IPOs) and the number of listed entities in the Australian and global markets, the Discussion Paper seeks feedback on how the public markets can be made more attractive to entities seeking to list or raise capital, while maintaining appropriate investor protections. It also notes that ASIC is engaging with the Australian Securities Exchange to consider the current IPO pathway and ongoing listing rules.
Private market risks and market efficiency and confidence
The Discussion Paper outlines ASIC’s views of the risks associated with investments in private capital funds. ASIC calls out opacity and unfair treatment of investors, conflicts, valuation uncertainty, investment illiquidity and leverage risks. It seeks feedback on the regulatory settings and oversight of private markets, the risks for investors from private markets and the role of incentives and how the risks are managed in practice by private market participants.
Retail investor participation in private markets
The Discussion Paper sets out ASIC’s concerns that investors have limited access to private markets and seeks feedback on whether this should be a concern, as well as any measures that could be implemented to improve access, while also maintaining sufficient protections.
Transparency and monitoring
The Discussion Paper notes ASIC’s views that there is less transparency and oversight in private markets and seeks feedback on whether the current financial services laws provide sufficient protection for retail investors investing in private markets.
ASIC also notes the growing significance of superannuation in Australia and the role of superannuation funds is woven throughout the paper.
The Discussion Paper also sets out key trends in global markets (including whether those trends are consistent with and/or likely to impact the Australian market) and analyses measures taken in other markets to address issues such as those set out above.
Publication of the Discussion Paper follows ASIC’s Corporate Plan 2024-25 (released in August last year) and ASIC’s Key Issues Outlook 2025 (published in January this year), which identified changes in public and private markets (including the significant growth of private markets and the implications for the integrity and efficiency of public markets) as a key regulatory activity.
Submissions on the Discussion Paper are due by 5pm on 28 April 2025.
See also:
ASIC’s media release.
ASIC’s REP 807 Evaluating the state of the Australian public equity market: Evidence from data and academic literature, prepared by Dr Carole Comerton-Forde, Charles Lane Advisory Pty Limited which ASIC says had informed its approach in the Discussion Paper.