ASIC fast-track early review: a faster & better pathway for ASX IPOs?

ASIC has introduced with immediate effect a two-year trial offering an early review of certain confidential pathfinder prospectuses or product disclosure statements (Pathfinder or PDS). This initiative aims to streamline IPO processes for qualifying IPO candidates and reduce deal risk.

To qualify, the candidate must meet ASX’s Fast Track criteria under the recently updated ASX Guidance Note 1, (i.e a minimum market cap of $100 million and no ASX-imposed escrow).

To take advantage of the early review process, the candidate must deliver a Pathfinder to ASIC at least 14 days prior to the intended date of formal lodgement. ASIC has also noted that applicants must:

• ensure the final lodged prospectus or PDS closely matches the Pathfinder, except for pricing and financial metrics; and
• avoid extended delays between ASIC’s informal review and formal lodgement.

Failure to comply with the above could defeat the early review process and ASIC's normal review processes would then apply.

When an applicant formally lodges the offer documents with ASIC, there is a mandatory 7 day “exposure period” after lodgement and before the offer can open (Exposure Period). ASIC has the power to extend the Exposure Period to 14 days.

If ASIC completes its review of the Pathfinder within the early review period, and subject to material changes or delays as noted above, ASIC states that the Exposure Period will not be extended to 14 days.

This early review period allows ASIC to assess the Pathfinder before it becomes public (as opposed to reviewing during the Exposure Period). A key benefit of the early review process is the ability to address any concerns from ASIC earlier and privately, and thereby potentially avoiding the need for:

• Replacement prospectus: which are typically used if ASIC raises concerns during the Exposure Period.; and/or
• Supplementary prospectus: which are typically issued after the offer opens to address materially adverse events which arise or become known.

If lodged after the offer opens, these documents trigger investor withdrawal rights and typically extend the offer period by at least a month, and as a result, disrupt the offer process. ASIC has also introduced a class no-action position allowing entities applying for listing under ASX’s Fast Track process to accept applications during the Exposure Period.

As noted above, under normal circumstances, entities must wait for the Exposure Period to lapse before accepting applications under a prospectus. However, ASIC has confirmed it will now not take action for contraventions of sections 727(3) or (6) of the Corporations Act if the relevant entity accepts applications during the Exposure Period.

Entities do not need to apply to ASIC to rely on this relief. However, they should be aware that ASIC may modify or withdraw the no-action position at any time, and its general policy on such positions as outlined in ASIC Regulatory Guide 108 continues to apply.

ASIC’s early review process and ASX’s updated Guidance Note 1 aim to streamline IPOs for Fast Track applicants. These reforms primarily support larger, well-established companies that meet the ASX's profit test. As discussed in our previous article, the ASX has tightened eligibility for the Fast Track Process, and ASIC’s latest initiative reinforces this direction by offering procedural efficiencies exclusively to those who qualify.

In contrast, smaller or early-stage growth companies continue to face the existing regulatory requirements (if not greater scrutiny under ASX’s updated Guidance Note 1), with little in the way of new support or flexibility to ease their path to listing. This continues to frustrate the up-and-coming technology and life sciences companies who need access to the ASX to raise funds to continue their development activities.