Legal Insights

ASX updates guidance on listing

• 12 June 2025 • 9 min read

Against a backdrop of signs of green shoots in the Australian IPO market, following the quietest year for a decade in 2024, the Australian Securities Exchange (ASX) has released an updated version of Guidance Note 1: Applying for Admission – ASX Listings. The new guidance, which came into effect on 30 May 2025 formalises a number of areas of existing ASX practice but also introduces several important changes which provide clarity on the listing process as well as more transparency for earlier stage companies considering listing on ASX.

Key changes

Foreign applicants and businesses

ASX has long encouraged early engagement with its admissions team by entities wishing to apply for admission to the ASX. This is particularly the case where an applicant’s structure or proposed waivers from the Listing Rules are unusual. The updated guidance notes that applicants who are incorporated or established outside of Australia, or have significant business operations outside of Australia (now defined to be generally where 25% or more of key financial metrics relate to foreign operations) are now explicitly encouraged to engage with ASX early. Other than for companies seeking a Foreign Exempt Listing, this will usually involve the company submitting a formal application for in-principle advice on suitability for listing early in the process.

ASX can still be an attractive listing destination for foreign applicants, with the potential for higher valuations than some foreign exchanges, access to Australia’s large superannuation pool and earlier index inclusion amongst the potential advantages and we do not believe there is any change of policy towards foreign applicants as a whole. Rather, early engagement is encouraged due to the complexities associated with such listings in order to identify and address potential issues early to ensure a smooth listing process.

Example
The updated guidance provides examples of particular instances where ASX may not be willing to admit an entity to listing which include where the applicant is established or has its main business operations in, or its controlling shareholders or a majority of its directors are resident in:
- an emerging or developing market where ASX has concerns about the maturity and effectiveness of the legal, regulatory and judicial systems or standards of corporate governance in that market;
- a jurisdiction associated with a heightened risk of corruption, organised crime, international fraud or money laundering; or
- a jurisdiction experiencing war or major civil unrest.

Fast-track process

Companies seeking to list on the ASX can do so via a standard or fast-track process. Under the fast-track process, ASX will conduct its review of the listing application based on a ‘pathfinder’ prospectus (i.e. before the final prospectus is lodged with ASIC) and draft application which can occur in parallel to the pre-marketing and bookbuild period. This generally shortens the ‘on risk’ period from 4-6 weeks to as short as 2.5 weeks, which aligns with the new trial informal review process introduced by ASIC this week. As part of the recent updates, ASX has formalised the criteria that must be satisfied in order to use the fast-track process, being:

the entity must be expected to have an initial market capitalisation of at least $100 million; and
the entity must not be expected to have any securities subject to ASX imposed escrow (or lock-up) (known as ‘mandatory escrow’) at the time of listing. Mandatory escrow applies in certain cases to entities admitted under the ASX ‘assets test’).

Early stage technology companies

ASX expects all early stage companies to be able to demonstrate a clear path towards commercialisation and clear plans on how it intends to use the funds raised from the IPO in order to be suitable for listing. ASX has expanded its commentary in respect of early stage businesses which must have ‘developed to a point where listing is appropriate’. This will be determined by ASX on a case by case basis, however ASX has helpfully included a list of positive and negative factors that it will have regard to when assessing the suitability of early stage technology, biotechnology and medical technology entities as summarised below.

Issue	Positive Factors	Negative Factors
Background of the entity	The business has been developed and grown by its promoters over a period of time.	The business was recently acquired by its promoters and there is no continuity of key personnel.
Level of development	Material cash has been spent over several years developing the business.	There has been little, or no cash spent on development.
Revenue and commercialisation	There is a market for the product and commercialisation opportunities, as evidenced by: revenue of $1 million or more in the last 12 months; or binding agreements for sales of $1 million or more in the next 12 months.	No revenue or binding agreements to generate revenue.
Ownership of intellectual property	Intellectual property rights granted or applied for in each relevant jurisdiction and target market.	No intellectual property rights granted or applied for in each relevant jurisdiction and target market.
Investment history	the entity has conducted material seed raisings from independent parties;. funds raised in seed raisings have been at prices demonstrating a decreasing level of risk;. funds raised in seed raisings directly contribute to the advancement of the technology and business.	the entity has conducted no material seed raisings. seed raisings have been conducted at nominal prices. seed raisings have been conducted without subsequent and meaningful development of the technology and business.

Similar factors will also be taken into account when assessing the suitability of early biotechnology or medical technology sector applications, with an additional focus on:

whether the applicant has secured the key licences or government approvals required to operate its business; and
where the applicant is not yet generating revenue, the status of any planned or required clinical trials and, where applicable, how promptly they can be commenced and conducted post listing.

In order to demonstrate satisfaction of these criteria, we recommend all early stage companies make a formal application for in-principle advice to ASX regarding their suitability for listing as an initial step in the listing process, before incurring significant costs and time in preparing for an IPO.

Accounts

Preparation and audit of accounts is often a key driver of the timetable for listing. Tier 1 general purpose accounts for the most recent financial year or half year are required to be provided to ASX as part of an entity’s application for admission. ASX has updated its guidance to reflect its current practice that Tier 2 general purpose accounts for the two prior financial years may be provided, where an entity has not been required to prepare tier 1 general purpose accounts for those prior years. Additionally, if a reporting deadline passes in the period between when an entity has lodged its application for admission but before admission to the ASX, ASX may require that an updated reviewed pro-forma statement of financial position be released as a pre-quotation disclosure.

Working capital

Entities admitted under the assets test (that are not investment entities) must demonstrate that they have sufficient working capital to meet their stated objectives and must have minimum working capital of $1.5m at listing. While this requirement has not changed, in its updated guidance ASX has stated that it will not generally grant a waiver of this requirement even if the company has funding facilities available to it to make up any shortfall amount. Accordingly, in order to be counted, any working capital facilities must be drawn down and available for use as a current asset.

Implications for potential applicants

While many of the changes to Guidance Note 1 reflect ASX’s existing admission practices and policy, some of the changes may impact IPO timetables, making early planning and engagement with ASX more critical than ever.