ASIC Public and Private Markets Discussion Paper – Our submission

On 26 February 2025, ASIC released a discussion paper “Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets”.

In its discussion paper, ASIC discusses the shifting dynamics between public and private markets and the widespread interest and concern regarding the implications of this. The paper is designed to facilitate discussion, articulate ASIC’s preliminary views and gather actionable ideas for ASIC to consider to enhance the operation of public and private markets.

In the paper ASIC refers to the growth in private markets, its ‘concern’ for public equity markets and the importance of both public and private markets to Australia’s economy.

Herbert Smith Freehills has made a submission to ASIC in response to all of its discussion questions (available here) where:

1. We agree with ASIC’s assessment that both public and private markets play an important role in supporting business growth, wealth creation, investment opportunities, and addressing Australia's economic challenges.
    
2. We query ASIC’s view that it is too early to say whether Australia’s recent decline in net (and new) listings is cyclical or structural, suggest that this recent decline may be part of a greater (and arguably more concerning) structural change in Australia’s public equity markets, and call for further work to be undertaken in relation to understanding this trend.
    
3. We propose that consideration be given to improving the regulatory settings of Australia’s public markets to maintain or improve their attractiveness. We consider that improvements should be made to the listing process and, more importantly, the post-listing regulatory environment. We propose specific reforms for the listing and post-listing environment in our submission.
    
4. We submit that improving the attractiveness of Australia’s public markets should not be achieved by increasing private capital regulations to ‘level the playing field’ with public markets because in our view private capital regulatory settings are generally sufficient already, and because it is of great importance to maintain Australia’s attractiveness as a  destination for global capital flows (there being a risk that increased regulation of private capital markets will impact this).