ASIC Grants Regulatory Relief for Companies Planning IPOs

Source: Regulation Asia Editors, Regulation Asia 2020-08-31

ASIC is granting relief for voluntary escrow arrangements and pre-prospectus communications to security holders and employees to reduce IPO red tape.

ASIC (Australian Securities and Investments Commission) has issued regulatory relief to help reduce red tape for companies undertaking an IPO.

ASIC consulted on granting the relief in February. It received four submissions that were generally supportive of the proposals, but raised issues about some of the specific requirements and conditions of the relief. The consultation conclusions are available here.

The relief being provided enables public companies, professional underwriters and lead managers to require certain security holders to enter into voluntary escrow arrangements (to prohibit early disposal of the securities) without acquiring a relevant interest for the purposes of the takeover provisions (but not the substantial holding provisions).

To date, ASIC has regularly granted conditional relief for voluntary escrow arrangements in connection with an IPO on a case-by-case basis.

In addition, ASIC is granting relief that permits companies to communicate certain factual information to security holders and employees before lodging an IPO prospectus with the regulator.

“Given the significant costs involved in undertaking an IPO, our new legislative relief will help reduce the regulatory costs for companies considering going public, while upholding an orderly and transparent market,” said ASIC commissioner Cathie Armour.

The relief – granted under legislative instruments – is provided subject to issuers meeting certain requirements and conditions of the relief.

ASIC has issued updated guidance on the circumstances under which an issuer may rely upon ASIC’s relief.

ASIC

Regulation

IPO

go public

investment

ASIC Grants Regulatory Relief for Companies Planning IPOs

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!