Australia’s top company directors have a clear message for the corporate regulator: simplify the rulebook. Mounting compliance burdens and the sheer complexity of the Corporations Act are making board roles less attractive and deterring companies from going public, they warn.
Australian company directors have long voiced concerns about the growing complexity of the corporate regulatory framework that is monitored and enforced by the Australian Securities and Investments Commission (ASIC) — particularly burdens imposed by the Corporations Act 2001.
In its 2025 submission to ASIC’s Evolving Capital Markets discussion paper, the AICD warned that regulatory accumulation is “a key factor in the declining attractiveness of public markets and board participation”.
ASIC chair Joe Longo has in the past conceded regulatory complexity “raises costs, stifles innovation and makes compliance harder”. In November 2024, he launched the Regulatory Simplification Initiative to cut red tape, improve clarity and make financial regulation easier to navigate.
Since then, a Simplification Consultative Group, supported by an expert advisory panel, has been steering the effort. Report 813: Regulatory Simplification released in September 2025 outlined the progress and invited stakeholder feedback on which actions should be prioritised.
Glenda Hanson, consultant at King & Wood Mallesons, and Tim Bednall, head of KWM’s Corporate Governance practice, are both members of the expert advisory panel. Together, they outline below what the initiative means for directors.
What has happened so far
It has been a little over a year since Longo announced ASIC’s simplification initiatives. Since then, ASIC has:
Appointed the ASIC Simplification Consultative Group — a panel of community leaders, including the AICD chair, Naomi Edwards FAICD, supported by expert advisers.
Made it easier to navigate the ASIC website.
Developed a test case for assessing how over 270 ASIC instruments, which currently amend the Corporations Act, can be made easier to understand and comply with, without changing what they mean or do.
Surveyed directors of small businesses and responded to their preferences for information in a pilot regulatory roadmap.
Removed over 9000 pages of outdated or redundant content from its website.
ASIC is also actively transitioning away from paper-based forms toward electronic lodgement.
Possible law reform initiatives, which will require legislation, include:
Improvements to the breach reporting requirements for Australian Financial Services (AFS) licence holders.
Simplification of the rules that require investors with large shareholdings in listed companies to disclose their ownership.
What directors would like to see
Anecdotally, the resolution of pain points such as wet ink signatures, paper lodgements, the need for duplicate or unnecessary detail, and an array of confusing ASIC portals are front of mind for many businesses.
Currently, more than 270 legislative instruments amend the obligations set out in the Corporations Act and they’re often difficult to find and understand. ASIC produced two model legislative instruments in its pilot project to test how they could be simplified without changing policy settings.
While ASIC administers and enforces the Corporations Act and related Australian financial services (AFS) laws these can only be amended through legislation passed by Parliament. Top of the reform wish list for AFS licence holders is the “reportable situations”, or breach reporting, regime, which can be particularly burdensome when making subjective assessments on the materiality and impact of a breach. Reform is also a priority for ASIC, as the regime generates about 10,000 reports a year, many of which are minor or immaterial
Directors would also welcome (what is the source for directors here please add. If you are quoting from an AICD submission we need to say so) a less onerous application process for an AFS licence. As this currently takes five to eight months, plus time to prepare the laboriously detailed submissions, it prevents them from responding nimbly to new opportunities.
More fundamentally, there may be a case for reform of the business judgement rule. This currently provides a safe harbour for directors from certain obligations when their decisions were informed, in good faith and rational. This might be extended to cover decisions relating to compliance matters where a business judgement is required, such as continuous disclosure obligations and forward-looking statements.
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Consistency across policies and jurisdictions
ASIC’s simplification initiatives are consistent with recent initiatives by Treasury and the Australian Prudential Regulation Authority (APRA) and broadly aligned with international regulatory trends toward clarity and greater proportionality.
APRA is currently consulting on a more proportionate bank licensing framework. It has explored how to reduce the regulatory burden on small and medium-sized banks and is seeking to make its broader regulatory framework easier to navigate.
Treasury has written to 38 Commonwealth regulators to request new ideas for improving regulation and reducing unnecessary compliance burdens. This resulted in the public release of over 400 ideas, including around 150 actions that could be implemented without legislative or budgetary changes. The Treasurer has signalled an expectation for Commonwealth regulators to focus on cutting unnecessary rules and making regulation simpler and is separately pursuing a principle of “tell us once” to remove duplicative processes.
In the United Kingdom, the Financial Services Regulatory Initiatives Forum was launched in July. The regulatory burden has been reduced in some areas including the regulation of investment managers, capital markets and smaller banks.
The European Commission has made regulatory simplification a central pillar of its policy agenda, and the European Central Bank has established a taskforce on simplification.
What directors need to do now
ASIC’s simplification initiatives show an ambitious openness to ideas and may in time reduce the complexity and overall burden on directors. Ultimately, they may also reduce compliance costs and increase productivity in financial services businesses.
The reforms are likely to unfold progressively over a number of years and, as yet, it’s too early for companies to make significant changes to their own processes. However, boards should keep abreast of regulatory simplification initiatives and understand implications and potential benefits for their organisations.
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