ASIC Corporate Finance Update – Issue 27
- 3 days ago
- 5 min read
ASIC has released Corporate Finance Update – Issue 27, which provides new guidance on four important topics. The publication highlights current regulatory focus areas and draws the attention of market participants to upcoming reforms.
We discuss the key developments and practical implications below.
Enhanced beneficial ownership disclosure for listed entities
The enhanced beneficial ownership disclosure requirements for listed entities under Schedule 1 of the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 (Cth) are scheduled to become effective in December 2026. The new regime is being introduced to improve transparency by revealing who actually owns, controls and receives returns from listed entities.
In particular, under the amended version of the Corporations Act 2001 (Cth) (Corporations Act):
a person in the bought (long) position of a derivative (for example, an option, futures contract, swap or contract for difference) will be considered to have a deemed economic interest in the securities underlying the derivative, whether or not the derivative attaches voting rights, which the person will be required to disclose in accordance with the substantial holding notice obligations in Part 6C.1 and the tracing notice regime in Part 6C.2;
market makers, client-facing service providers and operators of clearing and settlement facilities will be exempt from requirements to report deemed economic interests, provided that dealings in the derivatives giving rise to the deemed economic interest do not influence the affairs of the listed entity in which the underlying securities are on issue;
the substantial holding disclosure requirements which apply to Australian-registered listed entities and their shareholders will also apply to foreign-registered entities listed on Australian financial markets, except entities governed by regimes ASIC already considers equivalent (NZ, UK and US);
registers of relevant interests maintained by listed entities will be required to clearly identify the holdings in their registers of members to which each relevant interest relates;
the three separate forms used to disclose details of a substantial holding (Form 603 to give initial notice of a substantial holding, Form 604 to give notice of a change in a substantial holding and Form 605 to give notice of ceasing to be a substantial holder) will be replaced by a single form capable of displaying the same information; and
ASIC will have power to make freezing orders in response to contraventions of substantial holding disclosure, tracing notice and register of relevant interest requirements.
In connection with the reforms outlined above, ASIC has issued Consultation Paper 387: Enhanced Beneficial Ownership Disclosure. The paper explains the rationale behind proposed amendments, seeks feedback from stakeholders and is accompanied by a draft amendment instrument. Submissions close on 21 April 2026.
ASIC has also encouraged corporate finance practitioners and investors to review their current disclosure practices and ensure they are capable of complying with the more onerous requirements to be introduced later this year.
Note to independent experts regarding reports
ASIC has recently provided independent experts with a letter outlining a number of concerns relating to the clarity, rigour and transparency of independent expert reports.
Independent expert reports are commonly commissioned in connection with takeover bids, compulsory acquisitions and buy-outs, schemes of arrangement, related party transactions and capital reorganisations to assist security holders with decision making.
The letter delivered by ASIC reminded experts that they are gatekeepers of the financial system and emphasised that reports must:
clearly explain and justify the selection of valuation figures and ranges to ensure investors can understand the basis for transaction opinions;
provide a robust rationale for the choice of valuation methodologies in accordance with Regulatory Guide 111: Content of expert reports;
clearly disclose all material assumptions underpinning opinions;
demonstrate critical assessment of any technical specialist engaged by the expert and a thorough review of technical specialist reports; and
be supported by robust internal policies and procedures aligned with current regulatory and professional standards.
If ASIC is concerned that an expert is not meeting their obligations, it may take action to protect retail investors. Recent failures have resulted in Australian financial services licence holders agreeing to abstain from providing advice as an independent expert in response to concerns raised by ASIC.
Independent experts should regularly review internal policies and procedures to ensure they are appropriately documented and applied in accordance with both the Corporations Act and ASIC guidance in practice.
ESS relief for AIM-listed entities
Division 1A of Part 7.12 of the Corporations Act provides exemptions from disclosure and Australian financial services licensing requirements for offers of interests under employee share schemes (ESS). Entities listed on local financial markets (for example, ASX) and foreign markets approved by ASIC qualify for these exemptions.
In ASIC Corporations (Definition of Approved Foreign Market) Instrument 2017/669, ASIC listed a number of foreign markets which it approved for the purposes of the ESS provisions of the Corporations Act. The list did not include AIM, a sub-market operated by the London Stock Exchange.
Following receipt of an application seeking to modify section 1100K to the extent necessary to allow an entity listed on AIM to rely on the ESS provisions, ASIC granted relief on the basis that the disclosure, financial reporting and governance practices on AIM were comparable to ASX-listed entities or companies listed on approved foreign markets.
It should be noted that AIM remains a market which is not approved by ASIC for the purposes of the ESS provisions of the Corporations Act. Accordingly, AIM-listed entities are not entitled to rely on the ESS provisions without a specific modification of section 1100K.
Describing resource estimates as JORC-compliant
ASIC has observed an increase in disclosure documents describing mineral resource estimates as ‘JORC-compliant’.
The Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition) (JORC Code) is a code for public reporting. It does not govern how mineral resources or ore reserves are estimated by competent persons.
While information in relation to a mineral resource can be prepared and reported in compliance with the JORC Code, the manner in which it is estimated by a competent person cannot. Accordingly, describing a mineral resource estimate as ‘JORC-compliant’ is potentially misleading.
The following are examples of more accurate ways to reference compliance in disclosure:
describing information in relation to a mineral resource as having been reported in accordance with the JORC Code;
stating that a mineral resource has been estimated by a competent person in accordance with industry practice (and reported in accordance with the JORC Code); and
specifying that the term ‘mineral resource’ has the meaning given in the JORC Code.
Market research undertaken by Palisade Corporate indicates that 196 announcements have been released to ASX containing the term ‘JORC-compliant’ or ‘JORC compliant’ since the issue was highlighted by ASIC.
In light of the above, it is important that reporting entities review their disclosure practices and ensure that mining information is prepared in accordance with the JORC Code, ASX Listing Rules and ASIC guidance.
Author
Will Brehaut
Solicitor
+61 466 224 838
Important notice
This publication is general in nature and has been prepared for reference purposes only. Its content is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your particular circumstances should always be sought separately before taking any action based on this publication.