Australia’s securities regulator is urging the country’s stock exchange operator to accelerate efforts to simplify and expedite the initial public offering (IPO) process, as the IPO market continues to stagnate.
In a discussion paper released on Wednesday, the Australian Securities and Investments Commission (ASIC) warned that the diminishing number of companies listed on the Australian Securities Exchange (ASX) is detrimental to the nation’s capital markets.
Data from LSEG revealed that IPOs in 2024 raised just $2 billion, with $1.3 billion of that amount coming from a single company, data center trust Digico (DGT.AX). Excluding Digico’s contribution, the total IPO proceeds represent a near-decade low. Industry experts attribute the slump to global financial market instability, a rise in private buyouts, and the ASX’s stringent IPO process, which includes rigorous listing rules.
Investment banks have particularly criticized the lengthy IPO timeline, with the prospectus review and approval process by both ASX and ASIC taking up to a month.
ASIC Chairman Joe Longo emphasized the need for the ASX to take more initiative in streamlining its listing rules. “ASIC is receiving confidential feedback on potential improvements, and we are engaged in discussions on what can be done,” Longo stated. “The listing rules are ultimately the responsibility of the ASX, and we look forward to seeing them accelerate the review process.”
In response, ASX’s listings general manager James Posnett affirmed the exchange’s commitment to simplifying the IPO process, noting that ongoing efforts are being made to improve listing rules and operational procedures. However, he did not provide specific examples of changes in progress.
The number of companies listed on the ASX has dropped by 4% over the past decade, with A$69.1 billion ($43.89 billion) worth of companies delisted between 2022 and 2024 due to buyouts. Global IPO volumes have also been decreasing, with markets in Hong Kong and Singapore exploring regulatory changes to encourage more listings.
Longo stressed that it is crucial for the ASX to reassess its listing approach to remain competitive in the global market. “We need to ensure that we offer a listing environment that gives investors confidence and ensures Australia is an attractive destination for companies to list,” he concluded.
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