The IPO market in Australia has been struggling in recent years following a bumper year for IPOs in 2021 when there were 240 new listings. In stark contrast, there were only 29 IPOs in 2024 with a number of high profile companies leaving the exchange under take private transactions and the total number of listed entities falling from 2073 to 1989 over the ten years to 2024.

In response to the challenging market, the Australian Securities and Investments Commission (ASIC) has announced the first of a number of anticipated changes to streamline the IPO process following an industry wide consultation into public and private capital markets. This comes just a month after the Australian Securities Exchange (ASX) provided the latest updates to its guidance on admissions to listing, providing further clarity on listing requirements and timeframes.

The fast track listing process

ASIC is trialling a new process for review of draft or ‘pathfinder’ prospectuses to minimise the ‘at risk’ time for IPOs between formal launch of the deal and when shares begin trading. Under the proposal, which takes effect immediately, ASIC will informally review prospectuses for qualifying IPOs on a confidential basis prior to lodgement of the prospectus (when the prospectus becomes publicly available). This brings the Australian process more into line with many international equivalents where offer documents are pre-vetted by regulators before being released to the public. While the formal public “exposure period” following formal lodgement of the prospectus will remain, it is expected that this will rarely be extended beyond the minimum 7 day period and will also reduce the requirement for supplementary and replacement prospectuses except where there has been a material change in circumstances.

This new timeline also aligns with the fast track process provided by ASX, under which it reviews pathfinder prospectuses and draft listing applications prior to formal launch of the IPO. The ASX listing timeline is 4-6 weeks which, for qualifying companies, can run in parallel with the ASIC informal review and the pre-marketing processes.

The timeframe when the IPO is “at risk” as a result of market volatility and consequential pricing changes that may impact investor interest can under the new fast track process be reduced to under 2.5 weeks.

Example fast track timeline

ASIC’s trial will also permit companies to accept applications from retail investors during the exposure period under a “no-action” position which has previously not been permitted.  This should also assist in the administrative processes for IPOs.

Eligibility

Unfortunately, the fast track process is not, at least initially, being made available to all companies looking to IPO.  In order to qualify for the fast track process with both ASIC and ASX, the entity must have an expected market capitalisation on listing of at least AUD$100 million and must not be subject to ASX mandatory escrow (or lock-up) provisions. ASX mandatory escrow generally applies to earlier stage companies that do not meet ASX’s “profits” test and which ASX considers do not have an “acceptable track record of revenue”, generally at least $15 million over the last 12 months and at least $20 million in aggregate over the last three years.

Update to ASX Guidance on Admission to Listing

Last month the ASX released a revised version of Guidance Note 1 – Applying for Admission – ASX Listings which, in addition to clarifying the criteria that need to be met for the fast track process to apply, provides some additional guidance to companies who are seeking to list on ASX. The new guidance, which took effect from 30 May 2025 provides greater transparency to early stage technology, biotech and medtech companies considering listing as well as incorporating some changes which will help streamline the ASX admission process. See this article for further information.

Given the large pool of superannuation capital in Australia (the 5^th largest superannuation market in the world), the ability to access benchmark indices at an earlier stage and the ASX being one of the leading exchanges for follow-on offerings, these regulatory changes to the IPO process are very welcome initiatives which will hopefully drive momentum back into the Australian IPO market.