The Australian Securities and Investments Commission (ASIC) has released a comprehensive progress update outlining its next steps in reforming Australia’s capital markets. This follows its February 2025 discussion paper, Australia’s Evolving Capital Markets, which sparked significant industry dialogue around the future of public and private investment ecosystems.
The paper addressed a growing concern: Australia’s public markets are shrinking, with fewer companies choosing to list on the ASX, while private markets—particularly private equity and credit—are expanding rapidly. Superannuation funds, now major players in capital allocation, are also reshaping investment flows.
In response, ASIC received nearly 90 submissions from stakeholders including financial institutions, investors, regulators, and academics. The feedback revealed broad consensus on several fronts:
- Public Markets: Stakeholders called for reforms to make public listings more attractive, including simplifying IPO processes, reducing regulatory burdens, and improving investor engagement. There was concern that the current environment discourages companies from going public, potentially limiting transparency and retail investor access.
- Private Markets: While private markets offer flexibility and innovation, ASIC flagged risks around opacity, governance, and retail investor exposure. The regulator is now increasing its surveillance of private equity and private credit funds, particularly those targeting everyday investors. It is also exploring international models to improve data collection and oversight.
- Superannuation Funds: As dominant institutional investors, super funds are influencing capital flows and corporate governance. Submissions urged ASIC to ensure these funds maintain high standards of transparency, accountability, and stewardship.
ASIC Chair Joe Longo said the report showed the importance of adhering to existing regulation and highly regarded global standards to ensure confidence in Australia’s rapidly expanding $200 billion private credit sector.
“Private credit is playing an important role in our capital markets and Australia should implement industry standards that align with international best practice.
“Enhanced standards are needed to lift practices across the sector. They will help promote confidence, improve market integrity and empower investors to make informed decisions.
“When an industry agrees on clear standards, it shows a strong commitment to doing things right and we welcome the industry’s commitment to leading this work. They need to act decisively.
“While the report highlights some encouraging practices, it also reveals concerning behaviours that fall short of market expectations and more importantly that are inconsistent with existing financial services law. With the pace of growth in size and reach of the domestic sector, this becomes all the more important.
“Promoting confident and informed market participation is a shared responsibility, including those already demonstrating and upholding high standards.
“ASIC expects meaningful action in response to these findings and will not hesitate to intervene where progress falls short.”
Also read: Are Structural Spread Changes Concealing Value in Credit?
Looking ahead, ASIC will publish two detailed roadmaps later in 2025—one for public markets and one for private markets. These will include actionable reforms based on consultation feedback, aiming to modernize Australia’s financial infrastructure and maintain its global competitiveness.
Investment Council CEO Navleen Prasad said: “We commend ASIC for the approach they have taken in consulting with industry and in publishing the report by Mr Williams and Mr Timbs.
“We welcome the confirmation that private credit is an important source of funding for businesses that complements banks and, overall, works well. We also note the comments in the report about private credit as a source of returns for superannuation funds, institutions and other investors.
“The report affirms that many market participants, particularly at the institutional end, already adhere to good practices. The detail released today provides that much-needed next level of clarity about where ASIC sees a need for improvement.
“Private capital is the source of crucial investment into start-ups and growth businesses. It drives innovation, employment and competition across the entire economy.
“As with other international markets, private credit has grown substantially over the past several years. It’s timely to reflect on practices that are not in service of investors or the market as a whole, and to ensure there are clear guardrails that strike the balance between investor protection, market confidence and fostering growth.
“This report gives industry bodies a solid point of reference to coalesce around to explore appropriate guardrails. The Council welcomes the opportunity to work with other industry bodies in the coming months on this.”
