The new report, Advancing Australia’s evolving capital markets: Discussion paper response, builds on insights from recent ASIC studies into private credit, expert analysis and international best practice, with input from around 100 stakeholders.
ASIC says the report outlines the path to unlocking opportunities and tackling emerging risks in the nation’s public and private markets.
“Markets aren't some abstract construct. They represent the money and investment flowing through our economy. They are literally the lifeblood that lets businesses grow and employ people,” chair Joe Longo said.
“We want to ensure that we're making active choices about these how these markets develop - we get the markets we want.”
Longo said most developed countries were grappling with the same changes and that there were significant opportunities for Australia.
“We see enormous opportunity for public and private markets to thrive and grow together especially as they embrace new technology and innovation.”
He warned that the alternative is that technological development, or the opportunism of other countries, could see Australia become a passive recipient of changes – which may not be for the better.
Key goals outlined in the report include promoting growth in both public and private markets through innovation, new capital flows and technology adoption. Enhancing market integrity and investor confidence while supporting business access to capital is also a priority.
“This roadmap lays out the choices and future of Australia’s markets. We want our markets – private and public – to grow. That growth means stronger businesses, more jobs and a boost to our economy,” Longo said.
Longo said he had particular concerns over the rapid growth of technology and innovation.
“The growth of technologies like tokenisation [is] where ASIC and I are very concerned to ensure that we don't miss the bus on technology and innovation.
“We need to be doing whatever we can to facilitate innovation and technology in Australia.”
When it comes to public market initiatives, ASIC proposes supporting modernisation through improved listing frameworks and trading platforms. Streamlining IPO and disclosure requirements is also important, along with encouraging more foreign listings and reviewing director responsibilities and free float rules.
Addressing the sale of Cboe Australia which was announced at the start of this week, Longo said ASIC would like to see a change of ownership of the exchange.
“There's a lot of focus on how we're going to encourage competition. in those public markets are going forward,” Longo said.
Dr Carole Comerton-Forde from Charles Lane Advisory assisted ASIC’s roadmap by providing expert insights into the forces shaping the future of Australia’s capital markets.
The association between public and private markets is shifting as domestic and global forces reshape how capital is raised, allocated and governed, according to Dr Comerton-Forde.
“Public markets will remain an essential part of the system, given their unique strengths in price discovery, liquidity and governance. But without purposeful reform, they risk stagnating and becoming thinner, more concentrated and overshadowed by private alternatives,” she noted in her report Australia’s capital markets: Forces shaping the next decade.
“Private markets, meanwhile, are likely to keep expanding regardless of standards, but growth built on weak valuation and governance is inherently fragile – when stress arrives, failures and loss of trust may quickly unwind confidence.”
In future work, ASIC said it will publish a catalogue of fund managers’ obligations, update regulatory guidance for funds management and work with industry bodies to raise standards.
Superannuation funds
ASIC also highlighted superannuation’s growing role as a market-shaping force and emphasised trustees’ systemic importance. It plans continued supervision and enforcement to ensure market integrity and investor protection.
ASIC Commissioner Simone Constant said the agency’s work had reinforced the significance of superannuation as a market-shaping force in Australia and the importance of the supervision of superannuation trustees and platforms through its market cleanliness, financial reporting and audit, and investment disclosure activity.
“Our superannuation trustees are as systemically important as institutions like banks including in their role as stewards of other people’s money and market integrity.”
She said ASIC remains focused on how superannuation trustees are upholding their obligations to members and markets.
“We will continue to focus on their role in all the ways Australians engage with them, including market cleanliness, financial reporting, and investment disclosures,” she said.
Comerton-Forde added superannuation funds requires active stewardship and recognition that today’s allocation decisions will shape not only portfolio returns but also the future structure of Australian capital markets.
As for private market initiatives, the report notes the importance of strengthening supervision of wholesale funds with better government tools – including notifications, data and audits.
ASIC says the roadmap draws on critical findings from its new surveillance into the private credit sector. In September highlighted concerns in Australia’s evolving capital markets in a discussion paper on the dynamics between public and private markets.
