In recent weeks, regulators in both New Zealand and Australia have implemented what is hoped to be the first in a series of regulatory changes with the aim of boosting public markets activity and removing barriers for companies looking to list on the NZX or ASX.
Trends underpinning challenges facing public markets and the growth in private capital markets were well summarised in a recent discussion paper published by the Australian Securities & Investments Commission (ASIC). Over 60 submissions were received in response to that discussion paper. One of the themes identified was that, although there was mixed industry feedback as to whether the decline in initial public offerings (IPOs) was structural or cyclical, most respondents accepted some structural elements were at play, signalling the need for actionable change. You can read our previous article summarising the focus of that discussion paper here.
Regulatory reforms alone are unlikely to be enough to stem the tide on the broader themes identified. Having said that, it is positive to see regulators and law makers on both sides of the Tasman listening to market participants and taking steps to attempt to smooth the path for further listings.
In New Zealand, changes have been announced that will see the removal of the mandatory requirement for companies looking to undertake an IPO to publish prospective financial information (PFI). In Australia, ASIC has announced regulatory changes to limit the post-prospectus lodgement exposure period and limit administrative delays relating to retail investor applications.
New Zealand - Changes to PFI
Effective from 12 June 2025, the Financial Markets Conduct Amendment Regulations 2025 (the Amendment Regulations) make it optional for an issuer when raising capital through an IPO to publish PFI in its product disclosure statement (PDS). This will give the issuer discretion as to whether it thinks it fit to publish PFI and, if so, for what period of time. The Amendment Regulations also remove the requirement for published PFI to be prepared in accordance with Generally Acceptable Accounting Principles (GAAP), although issuers will still be required to identify the basis on which the PFI in the PDS has been prepared, briefly summarise the principal assumptions on which the PFI is based and refer to whether information about those assumptions can be obtained on the offer register.
This change brings the New Zealand regime broadly in line with other markets, including Australia. It is a welcomed change that will reduce the perceived risks of conducting an IPO in New Zealand and should bring commensurate cost and time savings.
Australia - ASIC’s new IPO rules
The changes announced by ASIC last Tuesday have immediate effect and provide for a two-year trial period during which:
• certain eligible companies can provide a ‘pathfinder prospectus’ (being a draft of the prospectus that omits pricing metrics and is used for institutional marketing) to ASIC on a confidential basis two weeks prior to public lodgement, seeking to reduce the need for supplementary or replacement documents and/or for ASIC to extend the exposure period; and
• retail share applications in those deals will be able to be processed during the seven-day exposure period, cutting down the administrative timeline for the IPO process. ASIC has announced a ‘no action position’, meaning it does not intend to take action for contravention of the relevant sections of the Corporations Act 2001 (Cth).
The prospective issuers eligible to take advantage of these changes are those seeking to use the ASX Fast Track Process, which means they must have a projected market capitalisation of at least AU$100 million with no mandatory escrowed securities.
These changes have been viewed as a step in the right direction in Australia.
In New Zealand, the Financial Markets Authority (FMA) already has a practice of reviewing offer documents before registration. So, ASIC’s new policy of pre-lodgement reviews will bring it into line with the position in New Zealand. The ability for applications to be processed in the exposure period is not currently something that is permitted in New Zealand without the consent of the FMA. However, as New Zealand IPOs are not typically underwritten meaning there is a back-end offer period and pricing event, the effect of New Zealand regulators following suit on this matter is likely to be limited.
What comes next?
The regulatory changes in both New Zealand and Australia support the sentiment that positive action is required to attract new talent to the public markets and retain current listings, particularly as private markets continue to pick up momentum.
Further regulatory change is anticipated and welcomed. In New Zealand, the Government is expected to continue its work on reforming certain aspects of the capital markets system. In Australia, ASIC is set to announce the adoption of further actionable ideas received during the course of the discussion paper process later this year.
If you have any questions about the matters raised in this article, please get in touch with the contacts listed or your usual Bell Gully adviser.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
