ASIC probes super funds’ capital markets influence | Australian Markets

The Australian Securities and Investments Fee (ASIC) has raised the growing dominance of superannuation funds in Australia’s economic system and their affect on market in a new dialogue paper inspecting alternatives and dangers in public and personal markets.

In releasing the dialogue paper, ASIC chair, Joe Longo stated the train was one of probably the most vital initiatives of the yr for ASIC noting that one of the important points was whether or not there needed to be regulatory interventions.

Longo stated ASIC is set to realize twin objectives by making certain Australia’s markets are enticing to corporations and traders whereas defending in opposition to dangers.

The ASIC dialogue paper famous that, in Australia, initial public choices (IPOs) are at their lowest level in over decade with many corporations selecting to remain personal.

On the similar time, the dialogue paper famous that a number of vital Australian public corporations have been taken personal lately with out commensurate new listings to replenish the public market.

It stated the 5 largest take-private and private-to-private transactions had an combination acquisition worth of $70.6 billion.

“Superannuation funds have been involved in several large take-private transactions. These include the acquisitions of Sydney Airport and AusNet Services. Large global private equity players have also contributed to delistings,” the dialogue paper stated.

“While history suggests Australia’s recent declines in the number of public companies are likely cyclical and that our listing settings have been attractive, the dynamics are changing due to global trends, the growth in private markets and the scale of superannuation funds,” it stated.

“ASIC is concerned about the future of Australia’s public equity markets. Deterioration in the quality, diversity and depth of our markets would have significant adverse effects on the economy and its liquidity and on Australians’ financial participation in these accessible and transparent markets.”

ASIC’s dialogue paper stated there was a need to be considerate concerning the conclusions to be drawn for Australia’s capital markets primarily based on world developments and to recognise home variations.

“The size of Australian superannuation funds influence our capital markets and will likely drive the further growth of private markets, embedding them into the structure of our economy. With superannuation now one of the most important assets in a working Australian’s life, it underpins Australians’ wealth,” it stated.