ASIC has released its roadmap to promote strong, efficient, and globally competitive capital markets in Australia.
The report, Advancing Australia's evolving capital markets: Discussion paper response (REP 823), outlines a roadmap to unlock opportunities and tackle emerging risks in Australia's public and private markets by embracing new capital flows and technologies, keeping pace with evolving investor needs, and making it easier for business and growth capital.
The roadmap draws on critical findings from ASIC's new surveillance into the private credit sector (REP 820). The report builds on the private credit expert insights released in September (REP 814), along with industry and expert insight from submissions received from around 100 sources in response to ASIC's discussion paper.
The roadmap also draws on expert insights from Dr Carole Comerton-Forde on the forces shaping the future of Australia's capital markets (REP 822) and from EY Parthenon on international approaches to private markets reporting (REP 821).
ASIC Chair Joe Longo said most developed countries were grappling with the same changes and that there were significant opportunities for Australia.
'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.
'Strong markets have strong market integrity. We want to lay the foundations for managed investment schemes and private markets to sustainably thrive for the future benefit of business and investors.
'We see enormous opportunity for public and private markets to thrive and grow together especially as they embrace new technology and innovation.
'At the heart of this roadmap is a clear message, that Australia and ASIC want to be backers, not blockers of investment and capital.
'This roadmap is the launchpad for action, not the finish line. Australia should be bold and seize the opportunities ahead, so that our markets remain strong, dynamic and globally competitive.'
ASIC strongly backs the modernisation of public markets to fuel growth and encourage participation, including support for new listing frameworks and robust trading platforms. The report details ASIC's work to streamline IPOs and disclosure requirements, and the need for market operators and government to closely consider director responsibilities, free float requirements and facilitating more foreign listings.
In private markets, the report outlines that ASIC needs better tools from government for effective supervision of funds, including notification of wholesale funds in operation, data collection, and independent audited financial reports for wholesale funds.
The report also underscores the role private credit is playing in Australia's financial system and sets out clear principles, grounded in the law, for private markets to lift practices to promote confident and informed participation by investors and borrowers.
In addition, for private credit, ASIC will:
- issue a catalogue that summarises fund managers' legal obligations and related ASIC regulatory guidance
- refresh funds management regulatory guidance on a targeted basis
- engage with industry bodies as they work to enhance industry standards.
ASIC Commissioner Simone Constant said the agency's work had reinforced the significance of superannuation as a market shaping force in Australia and 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,' Commissioner Constant said.
'As they expand and look for new areas to grow, we expect them to take on even greater importance in public investments and private credit, which in turn facilitates access for retail investors.
'Our roadmap sets out a future where private credit grows from strong foundations to give access to opportunity for investors and to capital for business and growth.
'Acting now to address poorer practices will help avoid future disruption. It is clear increased oversight of private markets is essential, and ASIC will continue its surveillance and enforcement work in private credit to ensure compliance with the law. If we do not see material improvements, we are prepared to pursue stronger regulatory action.
'ASIC's clear message is we want both options for Australia - settings that promote healthy, vibrant public and private markets - we want to hear your ideas, and we are watching to ensure opportunity and risk are appropriately balanced.'
Background
ASIC's discussion paper on the evolving dynamics between public and private markets explored the shifting dynamics between public and private markets, and the feedback was clear: both markets are essential to a strong, efficient, and globally competitive economy.
To support healthy and attractive public markets, the agency announced changes to the IPO process in June, and recently made a number of moves to foster competition and create more opportunities for companies and investors, and to attract more foreign capital to Australia.
Today's report addresses the fundamental questions the agency posed in its discussion paper at the start of the year about the future state of our markets, the risks and opportunities for productivity within them and the part that ASIC will continue to play.
