By Rachel Waterhouse, CEO, Australian Shareholders’ Association
Australia’s capital markets are undergoing rapid and significant change.
Over the past decade, we have seen a clear shift away from public markets and towards private capital. Companies are staying private longer, IPO activity has declined, and an increasing share of investment, especially through superannuation funds, is flowing into unlisted assets.
This evolution may offer some benefits to companies, like access to long-term capital and reduced compliance burdens, but it also raises significant questions about transparency, governance, and accountability.
The Australian Shareholders’ Association (ASA) recently made a detailed submission to the Australian Securities and Investments Commission (ASIC), calling for reforms that:
- protect investors and increase transparency in the private markets; and
- make Australia’s public markets more accessible for companies seeking capital.
The Problem: Reduced Transparency and Growing Risks
There is clearly a role for private markets, but their rapid expansion has outpaced regulatory oversight.
ASIC has expressed the challenges in quantifying the scope of private capital, while retail investors often lack the information needed to assess offers, exposing them either to undue risk or excluding them from opportunities altogether.
Yet whether directly invested or indirectly through their superannuation, Australians are increasingly exposed to private assets, many of which lack clear visibility on performance, governance, and risk. The implications for long-term retirement outcomes are significant.
The ASA 2025 Investor Sentiment Survey on Capital Markets highlighted three key concerns among retail investors:
- a lack of transparency and the perception that some investors receive preferential treatment;
- poor management of conflicts of interest, particularly related-party transactions; and
- challenges in valuing illiquid assets, which can distort performance assessments.
Unlike listed companies, which are subject to continuous disclosure obligations and shareholder voting, private assets often operate behind closed doors, leaving investors with limited influence and fewer protections when things go wrong.
The Case for Reform: Five Key Priorities
- Preserve the strength of public markets
Regulation requires public markets to be transparent, liquid, and accountable, and these features benefit all participants.
Yet the current trends are seeing fewer companies choosing to list, in large part due to regulatory burdens and the costs of compliance.
ASA has suggested that ASIC should:
- review the regulatory and cost barriers for small and mid-cap companies;
- reassess compliance obligations that may currently deter listings; and
- explore initiatives that might reinvigorate the IPO market.
The health of our public markets directly affects retail investors’ ability to invest, vote, and hold companies to account, but the regulatory burden is undermining that opportunity.
2. Extend protections to private markets
As access to private markets expands, investor protections must keep pace.
Sensible reforms are needed to ensure that transparency and accountability are introduced, but without overburdening the sector with unnecessary red tape.
Strategies might include strengthening gatekeeper responsibilities for financial advisers and product issuers, especially for managed funds and superannuation products offering exposure to unlisted assets.
There should also be minimum disclosure standards on risk, performance, valuation methods, and steps should be taken to ensure greater liquidity of investments in the private space.
These reforms should mirror the expectations we have for listed entities, but without significantly increasing regulation.
Sensible reforms should ensure transparency and accountability without overburdening the sector with unnecessary regulation.
These could include:
- strengthening gatekeeper responsibilities for advisers and product issuers, particularly for managed funds and super products with unlisted exposures;
- establishing minimum disclosure standards for risk, valuation methods, and performance; and
- exploring ways to improve liquidity options for retail investors.
These safeguards should reflect the standards applied to listed entities, without imposing excessive regulatory burden.
3. Improve access and listing pathways
Recent trends have favoured institutional investors in placements and capital deals, often at the expense of retail shareholders. The shift to private capital has enabled this trend to grow unchecked.
To reverse this, public listing pathways must be more accessible and attractive.
Potential solutions include:
- transitional regimes for pre-IPO companies;
- regulatory sandboxes; and
- streamlined frameworks for high-growth or innovative sectors such as technology and climate solutions.
Retail investors should not be excluded from participating in a growing share of the market. Reforms must ensure they can access capital raisings, IPOs, and corporate actions on fair terms.
4. Promote comparability through better data
Data gaps undermine informed decision-making. The opacity of private markets makes it difficult for investors to assess risk, return, and performance.
ASA recommends that ASIC collaborate with APRA, the ATO, and the ABS to map exposures and establish consistent data standards.
This will allow regulators, policymakers, and investors to better compare activity and risk across public and private markets.
5. Uphold retail investor voice and rights
Retail investors bring diversity and democratic accountability to capital markets. They help drive better governance and corporate transparency.
ASA urges policymakers to:
- include retail investor perspectives in reform processes;
- preserve investor rights across both public and private markets; and
- ensure disclosures are meaningful and accessible to all participants.
This is not about turning private markets into public ones, but rather ensuring a more level playing field.
Fairness, access, and informed consent must be prioritised in a healthy capital market system.
The Path Ahead
As the line between public and private markets continues to blur, Australia must hold firm to the principles that underpin strong capital markets.
Transparency, participation, accountability, and accessibility are critical, not only for retail investors but also for superannuants and the broader economy.
ASA’s submission is a call to action: to modernise regulation, reduce listing barriers, and ensure that investors, large and small, can continue to invest with confidence.
It’s in everyone’s best interest.
You can read the full ASA submission to ASIC here.
