ASIC expedites early review process

ASIC has implemented a new initiative that offers a faster and more efficient pathway for certain ASX IPOs. This two-year trial allows for an early review of confidential pathfinder prospectuses or product disclosure statements (Pathfinder or PDS) to streamline IPO processes and reduce deal risk.

To qualify for this early review process, candidates must meet ASX’s Fast Track criteria outlined in the recently updated ASX Guidance Note 1, including having a minimum market cap of $100 million and no ASX-imposed escrow. Candidates looking to take advantage of this opportunity must submit their Pathfinder to ASIC at least 14 days before the intended date of formal lodgement.

Applicants need to ensure that the final lodged prospectus or PDS closely aligns with the Pathfinder, with the exception of pricing and financial metrics. It is also crucial to avoid significant delays between ASIC’s informal review and formal lodgement to prevent the early review process from being overridden by ASIC’s normal review procedures.

Once the offer documents are formally lodged with ASIC, there is a mandatory 7-day “exposure period” before the offer can open. ASIC does have the authority to extend this period to 14 days if necessary. If ASIC completes its review of the Pathfinder within the early review period, and assuming no major changes or delays have occurred, the Exposure Period will not be extended to 14 days.

The advantage of this early review process is that it allows ASIC to assess the Pathfinder before it becomes public, enabling them to address any concerns earlier and privately. This can potentially eliminate the need for a replacement prospectus or a supplementary prospectus, both of which can lead to extended offer periods and disrupt the IPO process.

Furthermore, ASIC has introduced a class no-action position that allows entities applying for listing under ASX’s Fast Track process to accept applications during the Exposure Period. This easing of restrictions during the process streamlines the IPO journey for those qualifying under the Fast Track criteria.

While these reforms aim to make IPOs smoother for larger, well-established companies that meet ASX’s profit test, smaller or early-stage growth companies continue to face existing regulatory requirements. The lack of new support or flexibility for these companies can hinder their path to listing, particularly frustrating the technology and life sciences sectors that rely on the ASX for funding to fuel their development activities.