By Maria Lykouras, Chief Executive, SIAA
We may get excited about mega IPOs, but there are still too many hurdles for small and emerging businesses in Australia wanting to participate in public markets,
If you are an Australian investor following recent headlines, you could be forgiven for thinking the public markets were roaring back to life.
Only a few months ago, Australians had a rare chance to take part in one of the most closely watched global listings in years with the SpaceX float. Now Firmus Technologies is preparing what could be the biggest IPO in Australian history. After years of concern about a subdued IPO pipeline, two marquee deals might suggest listings are finally back.
Firmus Technologies is preparing what could be the biggest IPO in Australian history. Oscar Colman
These two blockbuster deals alone do not tell the full story of the public market. Beneath the many headlines that will no doubt be written on Firmus, Anthropic and their like in coming months, Australia is still losing listed companies, while the pipeline of new entrants remains relatively narrow.
We may get excited about mega floats, but for too many small and emerging businesses in Australia wanting to participate in the growth and access to capital that public markets can provide, the path to listing can still present significant hurdles.
The same is true for retail investors. Their participation is a hugely important part of a vibrant financial ecosystem, yet the rules can make participation more difficult for the very investors they are meant to protect.
Let’s start with companies. For smaller and emerging businesses, listing should be a natural step in a successful growth trajectory. Too often, however, it is viewed through the prism of cost, complexity, and the ongoing rigidity of being a listed entity.
Good governance should be the standard of entry and non-negotiable in our market. But that does not mean every governance practice designed for the country’s largest listed companies is appropriate for the smaller end of the market. Our view is high standards should not require a one-size-fits-all rule book.
Getting companies to market is only half the job. Investors also need a fair chance to participate – and Australians can find themselves several paces behind.
The ASX Corporate Governance Principles were deliberately built around “if not, why not” or the idea that a company can adopt a different governance practice if it can explain why that approach is appropriate for its size, stage and circumstances.
Applied to board composition, for instance, and a prescribed board skills matrix can become little more than a box-ticking exercise for a smaller, founder-led company. What matters is whether the board has identified the skills and experience the business needs and can explain that clearly to investors not just whether it conforms to a prescribed template.
That is the point of “if not, why not”. Yet in practice, recommendations can be treated as if they were mandatory. Smaller companies can face pressure from investors, proxy advisers and others to conform even where a recommendation is not proportionate or particularly useful.
Without that flexibility, both in principle and in practice, the public option becomes harder to justify.
For a growing business with a lean management team, listed compliance can quickly become disproportionately costly and burdensome. Founders then find themselves having to choose between remaining private, selling to a larger company or seeking capital elsewhere.
When too many companies make that choice because listing has become unnecessarily difficult, the public market is diminished. And we’re seeing the consequences. Twenty years ago, the ASX was attracting 155 new listings a year with roughly 2200 listed companies. Today, those figures are closer to 100 and 2000 respectively.
But, if you’re doing a full health check on our market, getting companies to market is only half the job.
Investors also need a fair chance to participate. And right now, Australian retail investors can still find themselves several paces behind.
Local SpaceX investors got a taste of that in June. The Australian prospectus was lodged on June 4 and the offer closed at 5pm on June 10, leaving retail investors less than a week to assess a complex cross-border offer and decide whether to participate. By then, institutional and wholesale investors may already have spent considerable time becoming familiar with the issuer and transaction.
ASIC recognised this and granted relief allowing specified communication with Australian retail investors before the prospectus was lodged. But ordinary investors should not need this kind of bespoke relief to get a fair shot at understanding a major offer.
ASIC’s proposed reforms to the pre-lodgement advertising regime are therefore welcome. They would allow earlier engagement while preserving the prospectus as the central disclosure document.
Done properly, and that means more time to understand an offer, more equal access to information and a better way for brokers and issuers to gauge retail demand.
Firmus may become an extraordinary Australian market event and it should be celebrated if it succeeds.
However, the real test of the health of our public markets is not whether we can produce the occasional blockbuster float. It is whether the next generation of companies sees the public market as an attractive place to raise capital and grow, and whether ordinary investors are given a fair opportunity to back them.
This article was first published in the Financial Review on 29 September 2026.
