Key points
- Capital markets are evolving and technology will accelerate these changes.
- Australia faces a choice – to innovate or stagnate. ASIC wants to be a backer, not a blocker of innovation and supports public and private collaboration.
- We must act now to put in place the foundations and the guardrails for the markets we want in the future – and this includes regulatory and law change.
Thank you, Tom, and thank you all for being here today.
I would like to begin by acknowledging the Ngunnawal and Ngambri peoples, the first custodians of this region, and pay my respects to Elders past and present. I extend that respect to Aboriginal and Torres Strait Islander people who may be present here today.
Like almost half of all Australians, I’m the child of immigrants.
My parents came to Australia from Italy after the Second World War. They met in Sydney, and shortly after marrying, decided to move back to Italy. But when they got to Perth, they ran out of money, so they set up shop there instead. And I mean literally set up shop – I spent much of my childhood in the back of my parents’ greengrocer’s shop!
Later, my mother, who was missing Italy terribly, wanted to move back, but my father was adamant that the children’s future was in Australia.
Why? Because Australia was – and is – the land of opportunity.
That’s the Australian promise – opportunity and a better life for the next generation. And it’s a promise, for a long time, Australia has delivered on.
But I’m here today with a warning – Australia must innovate or stagnate. Seize the opportunity or be left behind.
Right now, Australia faces a choice about the future of our markets. The world is changing, and our markets need to change with it. We shouldn’t be passive recipients of these changes – we should be ambitious and seize opportunities. And we should put the foundations in place today to ensure we will have the future that we want.
The last decade
Before I talk about what’s ahead though, it’s worth taking stock of where we are now.
Over the past decade, there have been significant structural changes in our markets.
The first is the rise of Australian private capital. This sector is still relatively small when compared to our $3.3 trillion listed equity markets, but it’s growing rapidly. According to one estimate, the private credit sector has grown 500 per cent over the past 10 years to more than $200 billion[1].
This rapid growth in private markets is a global phenomenon with a local protagonist. In the past decade, our superannuation system has grown to more than $4.3 trillion – outpacing growth in both GDP and our public markets[2] – and has become a structural driving force in developing private markets. Superannuation trustees play a key role in enabling retail investment in private markets – for most Australians, the main road into those markets currently runs through their super fund.
Which brings me to my first key point - the growth of private markets has been fundamentally good for the Australian economy.
Private credit in particular has emerged as an important source of funding for sectors that are currently under-served by the traditional banking sector and provides more diversification and choice for borrowers and investors alike.
But while this growth is helping fill gaps, we can’t forget public markets are also critical to Australia’s economy. And with the growth of private markets, we’re seeing structural changes to public markets, both here and around the world.
In the past decade, the market capitalisation of the ASX has nearly doubled[3] - yet the actual number of listed companies has declined. The top 20 companies on the ASX account for more than half of market capitalisation[4], making Australia one of the most concentrated markets in the world[5]. At the same time, the value of equity raised in initial public offerings in Australia has declined by more than 80 per cent, from $22.9 billion in 2014 to just $4.2 billion in 2024[6].
Of course, the important role for public markets remains, and ASIC is committed to doing what we can to make them as attractive and accessible as possible. However, what we’ve seen is that the rapid growth of private capital in the economy is actually enabling companies to stay private for longer. In other words, companies don’t need to go public to grow anymore.
And with new platforms like FCX entering the Australian market, new bridges are being built between public and private markets.
In the past we’ve tended to talk about public and private markets as if they were totally separate. But what our work is showing is a convergence. A shift. From public or private, to a single concept – the concept of ‘the market’. A shift that will only accelerate with new technology.
Technological change at pace
Technology developments over the next decade and beyond will make our current investing landscape appear as antiquated as the trading floors of the 1980s.
Distributed ledger technology that facilitates asset tokenisation could fundamentally transform our capital markets, in the same way as the introduction of CHESS once did.
Historically, investing in certain asset classes like private equity and fixed income, was reserved for institutional players or high-net-worth individuals. Tokenisation changes this by making it easier for assets to be broken into smaller, more affordable units, and traded quickly and securely on a global scale. And it allows new players to offer financial market services and challenge the status quo.
This isn’t some far-off future I’m talking about. J.P. Morgan have told me their money market funds will be entirely tokenised within the next two years. That means their investors will keep earning while value is moving instantly. Compare that to current technology where it takes days for transactions to settle.
And they aren’t alone. Subject to regulatory approval, Nasdaq has proposed launching tokenised securities trading 24 hours a day, five days a week, by late next year[7]. The American financial market infrastructure giant DTCC has also proposed its own tokenised platform[8].
And if assets and money exist on the same ledger, we could one day see ‘atomic settlement’ - simultaneous post-trade swapping of cash for an asset. Add quantum computing to the mix and this process could become even faster. On top of that, imagine what impact artificial intelligence could have on executing lightning-fast transactions.
Once, Australia was one of the early adopters of innovation in markets. We were an early pioneer of electronic trading[9]. ASX CHESS was innovative in its day … back in 1994. And the first tokenised bond from the World Bank was issued in Sydney in 2018 – the aptly named “bond-i”[10].
Now, other countries are outpacing us. Switzerland’s SIX Digital Exchange – operated by the Swiss equivalent of the ASX – launched its first digital bond issuance in 2021 and has already surpassed $3.1 billion USD[11]. And in the United Kingdom, firms are exploring tokenisation through the digital securities sandbox operated by the Bank of England and the Financial Conduct Authority[12].
I spent some time last month with the Chair of the U.S. Securities and Exchange Commission, Mr Paul Atkins, and what really struck me in my discussion with him was that Australia is facing the same challenges as other countries and is competing for the same capital. That other countries are actively courting this capital, and we need to as well. To my mind it means we have a window of opportunity now, while so many jurisdictions are facing the same challenges, to seize a larger slice of this opportunity.
But as other countries adapt and innovate, there’s a real risk Australia could become the ‘land of missed opportunity’ or be passive recipients of developments overseas.
The risk of failing to choose
If that occurs, the changes in our markets may not be for the better.
Even though the growth in private markets is a fundamental good, we still have challenges to address. For example, lower levels of transparency compared to international standards.
Compare this sector to the public market where people trade from a position of knowledge because of continuous disclosure obligations. This isn’t the case for transfers of value in a controlled private market, and that brings risk.
In a private market there’s also a lack of clarity around funds’ fee structures. Add to this the fact that the Australian private credit sector at its current levels is untested under market stress scenarios. With a large proportion of illiquid investments in high-risk real-estate developments, we have a good reason to be critically thinking about this.
That risk is amplified when we remember that private equity and credit are now firmly established as asset classes in superannuation and will continue to grow along with the rest of the superannuation pie.
While it’s true that, as a rule, super funds tend to have a stabilising effect on markets during times of stress, the sheer size of super means we need to start thinking about it differently. A severe and unexpected liquidity shock could cause super funds to raise liquidity in ways that increase financial market stress[13]. And historically, superannuation hasn’t had the same scrutiny as other institutions that are systemically important such as the banks, although that is changing.
We have already seen missteps and failures in the private credit industry as a result of the wide variance in practices across the sector. In recent weeks, we’ve pulled up La Trobe Financial and TruePillars Investment Trust for issues in how they are offering their products. We’ve seen high-profile collapses in the United States with First Brands and Tricolor, and warnings of ‘cockroaches’ and ‘contagion’[14]. And the Bank of England Governor Andrew Bailey has said the whole situation reminds him of how the global financial crisis started[15].
If we fail to address the risks building in this sector, we could very well see our own ‘Minsky moment’[16] in Australia with a market collapse. In times of prosperity when money flows freely, no one worries about liquidity. However, it’s the first thing everyone will miss in a crisis.
So while the sector is still small, we have time to act. And that requires us to make some conscious choices.
After all, risk done well is opportunity. And if we manage these risks well, there will be more diversification, more competition and more opportunity for all.
The way forward
So how do we ‘do risk well’?
The answer is by acting now to build the guardrails and the foundations that enable greater strength and integrity in our markets.
That is why ASIC started our work on evolving capital markets in the first place. The consultation we’ve been doing since our discussion paper in February has been about ensuring Australia stays competitive – so that our markets remain open, efficient, and attractive to investors – and that we maximise the opportunity before us.
The report we’ve launched today is a blueprint for turning risk into opportunity, and a call to action.
The report examines how we can invigorate our public markets and keep attracting investors. In addition to our streamlining of the IPO process, we’re engaging with industry on amended listing frameworks, new trading platforms, and expanding approved foreign markets for the listing of companies in Australia.
One of the overarching themes in our report is that we want to strike a better balance that minimises some of the ‘regulatory arbitrage’ we have heard about in our consultations. We’ve heard that this is not the only factor, however it has to be said that it is a factor that is contributing to private companies shying away from IPOs. Ask nearly any public company director in this country, and they will tell you their job is getting harder and harder.
There are a number of issues at play here, most outside of ASIC’s regulatory gift. But as a starting point I think Australia needs to seriously look at the line we draw between when a company is public and when it’s private, and the obligations that flow from that. Some of Australia’s largest private companies have very wide indirect retail ownership through superannuation and other vehicles. Canva is an example. Is it right that companies like that are subject to more limited disclosure obligations than for a much smaller public company?
I said earlier that our markets are converging, and technology will only accelerate this trend. In light of that, our traditional public and private dichotomy is no longer working. We need to work towards a framework where instead of drawing lines, we manage a spectrum of risk.
As a first step, the proprietary company threshold can and should be adjusted. Under the Corporations Act, a company is considered private only for so long as it has no more than 50 non-employee shareholders. That’s a low threshold compared to other jurisdictions and acts as a handbrake on company capital raisings that slows growth.
Another area that needs attention is prospectuses. In the past 20 years, prospectuses have more than doubled in length, from an average of 109 pages in 2005 to 266 in 2024. I am not convinced investors are being served by these lengthier documents.
Australia must make some critical decisions in the next few years - about how we modernise and strengthen our markets, how we ensure super continues its positive influence, and how the law can better support confidence in future growth.
The decisions ahead
The first decision is how to modernise and strengthen our market structures.
ASIC has already begun to ask how to ensure market structures remain fit for purpose through our capital markets work. The inquiry we launched earlier this year into ASX and its ability to maintain market infrastructure is part of this. But these questions aren’t ours to answer alone.
As markets evolve, market operators, participants and funds must evolve too. This requires fresh thinking and innovative ideas from all participants. There are some disruptors emerging in the Australian market who are doing things differently. Imperium Markets is an example, one of the players who are piloting tokenisation in debt markets as part of Project Acacia run by the RBA and the Digital Finance Cooperative Research Centre[17]. But we’re not seeing enough of this energy and enthusiasm in significant parts of our market. ASIC’s recent tokenisation survey was one example of this – around half the market declined to take part or even meet with us, and only one third provided detailed feedback.
Many players in Australia have gotten too comfortable with the status quo. Backing untested innovation means being prepared to take risks. Australia cannot be passive here, we need to be active, to take part and help lead these developments.
If that attitude doesn’t change, how long before Australians start to do all their trading elsewhere? It’s worth pointing out that Australians can already invest in some of the biggest companies in the world through platforms like Nasdaq.
It's generally the new players – fintechs – that are driving innovation and may ultimately disrupt traditional finance and market infrastructure.
The RBA’s Project Acacia is evidence of that, with these innovators leading the way in developing tokenised financial markets and new settlement services.
The choice is innovate or stagnate – to evolve or become extinct.
Market operators must also ask themselves are their settings right to compete with these international forces.
The ASX recently launched a review of its listing rules. It’s a necessary step toward boosting innovation and growth. The work of Doctor Carole Comerton-Forde in another report we released today, also shows that we need to rethink how our markets compete globally – from improving listing frameworks and liquidity for smaller companies to embracing mutual recognition and innovative trading models.
One area for consideration is whether reporting requirements should be tiered for company size. Why is it that a small cap biotech with less than $10 million in turnover has the same remuneration reporting requirements as our largest mining company, BHP, with a turnover of $80 billion? Or have more corporate reporting requirements than the operator of Sydney Airport, a company with over $2 billion in turnover, which is critical to growth and prosperity, and which millions of Australians are invested in through their superannuation? We need to be asking ourselves, is this really the right balance? How can these rules be more facilitative in enabling smaller players to access capital so they can grow?
The next decision we must make is how we leverage the strengths of the public and private sectors to accelerate innovation.
A persistent theme I hear from market participants – particularly from my recent meetings in the US and Europe – is that if we want to see innovation, they need to know what is expected of them. This is where I see a role for the public sector – government and regulators to set the guardrails and the foundations for innovation to thrive. If the public sector can be an enabler, the private sector can be an accelerator.
I’ve spoken often about the scourge of regulatory complexity and with rapid changes in our markets, we cannot afford to leave it unchecked any longer. The law cannot be static. Innovation starts with a legal framework that can evolve and adapt and that’s fit for purpose.
That’s why I welcome the recent formation of the Corporate Law Reform Alliance and their call to revive a standing expert body, similar to the former Corporations and Markets Advisory Committee[18].
I want ASIC to be backers, not blockers, of market innovation. Our recent work with the Reserve Bank on Project Acacia is one example of this. This trial has enabled digital money to move swiftly and securely through our economy in many forms[19]. We’ve also recently accepted an invitation from the Monetary Authority of Singapore to join the Project Guardian initiative, which has been pioneering the use of tokenised funds settling in central-bank money[20]. And we’ve just released our guidance on digital assets to provide regulatory certainty for industry to innovate with confidence[21].
But I think we can and should do more to support innovation from the ground up. So today I can announce that we will review and re-launch the ASIC Innovation Hub, with a focus on seeking out ways ASIC can support financial market innovations in Australia.
The Innovation Hub, as many of you will know, was launched a decade ago as a bridge between ASIC and the innovation ecosystem, and while operating, it’s supported hundreds of fintech and regtech businesses to navigate Australia’s regulatory framework.
Alongside supporting the Government’s review of the Enhanced Regulatory Sandbox to better encourage Australia’s fintech capability, the first priority of the revitalised Hub will be to assess its effectiveness and to do a scan of innovation in financial markets here and abroad to identify regulatory issues and opportunities, so that ASIC can be proactive and help Australia seize opportunities.
Our Hub will have an open-door policy. If regulation is an unnecessary hurdle to a new idea, we want to know about it. That doesn’t mean just pointing out problems though but working with us on solutions.
Our door is open to all collaborators – government, industry, universities, and thinktanks. We have already commenced preliminary discussions with the Pawsey Supercomputing Research Centre in Perth and the University of Technology Sydney (UTS) to explore opportunities to further operationalise the large volumes of data and information ASIC receives[22] – and we’re open to more partnerships and more ideas.
The final decision we must make is how the law can better support confidence in future growth.
If Australia is to seize the opportunities I’ve spoken about, Australians must have confidence in the system.
Many of the issues are outside ASIC’s regulatory gift. However, recent failures in private markets have exposed weaknesses in our regulatory framework and undermined trust.
The private credit sector is a small but increasingly important part of our economy, but it needs to grow from solid foundations. That is why today I’m putting the private credit sector on notice to improve industry practices.
We need to see a significant uplift in practices and if the sector can't get this right, law reform may be required – introducing new, mandatory obligations to lift standards and address poor consumer outcomes. But more rules would not be my first choice. If poor practices undermine the integrity of this sector as it grows, we may be left with no other option.
There is also work to be done flowing from the recent Shield and First Guardian collapses. There is an opportunity to strengthen the system for all Australians.
So I am repeating ASIC’s view of the need to strengthen requirements for managed investment schemes, improve data reporting, and give ASIC the powers we need to oversee this sector effectively.
I want to acknowledge the work the Assistant Treasurer has been doing in considering this very important issue.
Other ideas should be considered, including disrupting the lead generation businesses that trick consumers into moving their super, slowing down the superannuation switching process, reconsidering the retail/wholesale test, and extending the proposed prohibition on unfair trading practices to financial services.
We also need to look ahead. One of the fastest-growing segments of our superannuation system is platform trustees, with investments up 14.5 per cent in the year to June. One of the key themes of ASIC’s work in recent years has been to highlight superannuation trustees’ critical responsibilities to members. That’s why we keep asking whether trustees are doing enough to meet their obligations, including when things go wrong. This isn’t a question for ASIC alone - it’s a challenge for all of us. Getting it right will mean greater investor confidence and a more resilient, diversified market.
Before I wrap up, I want to acknowledge and thank Commissioner Simone Constant and our Executive Director of Markets Calissa Aldridge, who have been absolutely instrumental in ASIC’s private and public markets work.
Of course, this work has been and will continue to be a whole of agency effort from the Commission who are here today our CEO, the executive team and all of ASIC’s people. They have my thanks, not just for this, but for all they do to make a difference every day for all Australians.
Conclusion
So in conclusion, if we want our capital markets to thrive into the future, the time to act is now. That means finding ways to enhance the attractiveness and competitiveness of public markets so that we can promote sustainable growth.
And it means safeguarding transparency and investor protection, without stifling innovation or erecting unnecessary barriers to capital formation.
So, I’d like to leave you where I started: my family’s story.
My parents and grandparents made very difficult decisions, so their children and grandchildren could have the opportunities we have today.
And that’s a classic immigrant story - you make tough decisions now for the benefit of subsequent generations.
Like my parents and grandparents, we have an opportunity to act now, to make a difference for the next generation.
To choose our future, before it is determined for us.
Thank you.
[1] REP 814 Private credit in Australia and REP 823 Advancing Australia’s evolving capital markets: Discussion paper response report
[2] As at June 2025, total superannuation assets under management was comparable to around 160% of Australia’s gross domestic product (GDP).
[3] Discussion paper 1 Australia's evolving capital markets: a discussion paper on the dynamics between public and private markets. As of August 2024; refers to value of companies listed on the ASX.
[4] Report REP 807 Evaluating the state of the Australian public equity market: Evidence from data and academic literature Note: This concentration has been relatively stable over the past decade.
[5] Analyzing Stock Market Concentration | Morgan Stanley | Morgan Stanley
[6] Australia’s capital markets: Forces shaping the next decade, Dr Carole Comerton-Forde
[7] Nasdaq's Bold Step Towards 24/7 Trading with Tokenized Securities | Financial Services Blog
[8] The Depositary Trust and Clearing Corporation is a user-owned cooperative providing clearing, settlement, and depositary and trade reporting services. DTCC Launches Innovative Digital Collateral Management Platform | DTCC
[9] https://www.rba.gov.au/publications/bulletin/2001/dec/2.html
[10] World-Bank-DNN-Case-Study-October-2023.pdf
[11] Swiss Exchange Operator SIX Brings Digital Asset Entity In House | Crowdfund Insider
[12] Digital Securities Sandbox (DSS) | Bank of England
[13] Cf. RBA Financial Stability Review October 2025
[14] First Brands and Tricolour collapses make JPMorgan CEO Jamie Dimon worried about private credit sector
[15] Bank of England chief warns of ‘worrying echoes’ of 2008 financial crisis | Bank of England | The Guardian
[16] Coined in 1998 by US economist Paul McCulley, a ‘Minsky moment’ generally describes a sudden collapse of asset values after a long period of growth driven by debt and speculative behaviour. The term is inspired by US Economist Hyman Minsky’s financial instability hypothesis. According to the hypothesis, the rapid instability occurs because long periods of steady prosperity and investment gains encourage a diminished perception of overall market risk, which promotes the leveraged risk of investing borrowed money instead of cash.
[17] https://imperium.markets/pilot-to-test-tokenisation-of-australian-money-markets-and-debt-capital-markets
[18] Corporate law reform alliance calls for action to support economic growth and productivity
[19] Project Acacia: RBA and DFCRC announce chosen industry participants and ASIC provides regulatory relief for tokenised asset settlement research project | Media Releases | RBA
[21] 25-250MR Updated ASIC guidance supports digital asset innovation and boosts investor protection
[22] No procurement decisions have been made, and any procurement will be conducted in accordance with relevant regulations.
