The corporate regulator’s chair has acknowledged directors are being weighed down by growing regulatory pressures, but his long-awaited roadmap for Australia’s capital markets fell short of sweeping reforms many in the governance community had hoped for.
Addressing the National Press Club on 5 November, for the launch of the Australian Securities and Investments Commission’s (ASIC) highly anticipated capital markets report, chair Joe Longo warned company directors are facing increasing pressure in a rare public recognition from the corporate watchdog of mounting frustrations in boardrooms.
“Ask nearly any public company director in this country and they will tell you their job is getting harder and harder,” he said.
Longo issued a call to action, arguing unnecessary external burdens are also stifling innovation, and declared the starting point for reform is a serious look at the “line we draw between when a company is public and when it’s private”.
He directly challenged the disclosure disparity, questioning if it’s “right” that large private companies like Canva are subject to “more limited disclosure obligations” than a much smaller public company.
The chair also criticised the statutory limit of 50 non-employee shareholders for a private company, as per the Corporations Act, calling it a “low threshold compared to other jurisdictions” — one that “acts as a handbrake on company capital raisings and slows growth”.
“Australia must make some critical decisions in the next few years — about how we modernise and strengthen our markets, how we accelerate innovation, how we ensure super continues its positive influence and how the law can better support confidence in future growth,” said Longo.
His National Press Club address — likely his last ahead of retiring as chair in May — follows the regulator’s February discussion paper, which identified several worrying trends in local capital markets, including a sharp decline in new ASX listings alongside the rapid growth of the largely unchecked private credit market.
The regulator’s report, Advancing Australia’s evolving capital markets: Discussion paper response (REP 823), responds to nine months of stakeholder feedback, alongside several rounds of expert analysis.
Feedback included the AICD submission lodged in April, which highlighted “regulatory accumulation” as a key driver of the waning appeal of public markets, while also alerting to the “heightened risk” of shareholder class actions and an “increasingly complex stakeholder environment” that is faced by public companies.
“Our member engagement indicates it is also contributing to the decline in the number of well-qualified directors seeking roles on listed boards,” the AICD said in the submission.
Although the regulator accepted that the “two strikes” rule is a concern, amid feedback it deters quality directors, ASIC said only anecdotal evidence supported this and ultimately deferred the issue to the government.
“We support the policy intent behind the two strikes rule,” said ASIC. “However, we acknowledge concerns from company directors and other stakeholders about its application in its broader context. This is a complex policy issue that is a matter for the government to consider.”
The regulator also pledged to be open to “change and to engaging with the government” on remuneration reporting — an area the AICD previously argued adds unnecessary complexity to an already demanding stakeholder environment.
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ASIC further signalled steps to simplify administration of the Financial Accountability Regime (FAR) in conjunction with the Australian Prudential Regulation Authority (APRA) and, consistent with AICD recommendations, confirmed it will take tangible steps to refine listing pathways.
In the private markets sphere — and in private credit in particular — ASIC backed the AICD’s call for restraint, rejecting immediate broad-based intervention in favour of targeted reform.
“We need to see a significant uplift in practices and if the sector can’t get this right, law reform may be required — introducing new, mandatory obligations to lift standards and address poor consumer outcomes,” said Longo. “More rules would not be my first choice. However, if poor practices undermine the integrity of this sector as it grows, we may be left with no other option”.
Action agenda
Among the lengthy lists of priorities the corporate regulator signalled it will pursue over the next 12 to 18 months in respect of capital markets, these are key for company directors:
ASIC targets private giants: Chair Longo argued that Australia should “seriously look” at disclosure rules, citing Canva as a large private company with wide retail ownership through super funds that currently escapes the transparency demanded of smaller public firms.
Amend the “50-shareholder” limit: ASIC criticised the Corporations Act’s 50 non-employee shareholder limit, calling the low threshold a “handbrake on company capital raisings” compared to international rivals.
Disclosure is broken: Longo exposed the failure of disclosure documents, noting prospectuses have more than doubled in length in 20 years (to 266 pages) and concluding lengthy documents are not “better served” to investors.
Targeted surveillance: ASIC pledged to conduct further “targeted surveillance” of the funds management sector, specifically private credit funds involved in real estate lending, focusing on fees, conflicts of interest and distribution.
Streamlined listings: ASIC will “continue the ongoing two-year trial” to give fast-track IPO entities access to a shorter timetable and will “reconsider policy to streamline dual listings”, while also committing to report on the Inquiry into the ASX by 31 March 2026.
Next steps
The AICD has committed to continuing engagement with ASIC, its members and broader stakeholders as the regulator’s work progresses.
In response to ASIC’s latest report, Louise Petschler GAICD, AICD General Manager Education & Policy, agreed with Longo that “Australia needs to adapt and innovate or risk being left behind”.
In a piece penned for the Company Director magazine, Petschler applauded the watchdog for outlining “initiatives to support dynamic public markets” in its roadmap, including its efforts to streamline IPO processes and dual listings, and its reconsideration of the “one-size-fits-all” approach to listed entities.
“We welcome ASIC’s commitment to engage with government and industry on corporate governance frameworks for listed entities and differences in public and private market expectations,” said Petschler.
“It was also encouraging to hear the ASIC chair welcome the formation of the Corporate Law Reform Alliance (of which AICD is a member) and our call to revive an expert body such as the Corporations and Markets Advisory Committee to support corporations law reform”.
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