The Australian Securities & Investments Commission (ASIC) our regulator for capital markets and companies has put out a discussion paper requesting feedback and comment. Here is feedback based on my experience at the coalface as a partner of an Australian accounting firm.

WHAT IS THE POINT OF ANY OF THIS?

London (UK) and New York (USA) are in a constant battle to claim pole position as the financial capital of the world, and as a result of this are constantly playing a game of regulatory arbitrage. When one drops the ball the other picks it up and runs with it, gaining market share from the other, and vice versa. For example regulatory delays in the USA resulted in the eurodollar & derivatives market booms of the 80s & 90s for London allowing it to eclipse New York as the most favoured destination for capital, likewise the USA almost lost its crypto market darling Coinbase to London due to the delays in providing sensible and clarifying regulation, in addition to an openly hostile SEC due to its chair Gary Gensler.

Switzerland has always been a strong contender in the mix and now Singapore & Dubai are hot on their heels

Australia is so far behind it's not even in the race BUT IT SHOULD BE!

Instead of doing what the Philippines SEC and other pointless regulators the world over do by just copy pasting everything the USAs SEC does like sheep, we should be charting our own course constantly on the hunt for what other regulators around the globe are missing, set the regulatory gold standard for these areas and aggressively take the market share for companies in those markets who want to work with a competent and sensible regulator.

We also don't want to copy the EU who thinks they're the worlds leading regulator, but are actually just a laughing stock that nobody takes seriously because they set such draconian laws all their companies just leave. (AI Act anyone... )

If we’re as good at regulating as we would like to think we are, winning will look like companies leaving the UK and USA to incorporate in AU

DIGITAL SIGNATURES

The fact that company incorporations and trust settlements are still required by law to be wet signed in 2025 is an absolute disgrace and shows that ASIC is completely asleep at the wheel. As a result of the banking royal commission banks are now not allowing company or trust bank accounts to be opened unless the company or trust incorporation/settlement documents are provided and “wet signed”. That may have been appropriate in the 1950s but in 2025 for this to still be the case is absolutely inexcusable.

ASIC needs to update their regulatory guidelines so that digital signatures become a legal and allowable way to incorporate companies and settle trusts.

Rules should be provided so that directors, shareholders, trustees, beneficiaries, advisors and other institutions (banks, brokerages, etc) know what is and is not acceptable

A document signed with a docusign (or equivalent provider) is MORE secure than a wet signed document, as it has a timestamp, IP address and email address of each and every signer along an audit trail of the how the document was signed

To add insult to injury, acknowledging that digital signatures should already be allowable, we point out that this technology has already been superseded by blockchain signatures

So while playing catchup and implementing rules governing the obsolete digital signatures ASIC should at the same time also set sensible rules governing on-chain signatures as an acceptable and expressly allowed method for document signing.

SUPERANNUATION

Instead of trending in the direction of a more competitive and vibrant marketplace the industry is instead becoming an oligopoly of just a handful of colluding retail super fund giants. The current trend in this respect is very concerning.

The biggest threat that this poses is regulatory capture, which is already being expressed in the uneven way regulations are being implemented, disincentivising SMSFs and small retail funds for the benefit of large retail super fund giants.

As a first step the top 10 retail funds should be split up, with incentives put in place to encourage competition. Regulation should also be added preventing a re-consolidation later on down the track.

The growth in the superannuation industry is great, as long as it is decentralised and people have options. The easy switching and super choice rules were excellent initiatives and more policies like this should be looked at being implemented.

Superstream is a perfect example of regulatory capture in action. It was completely unnecessary and never needed to exist in the first place, and all it has achieved is the creation of an additional regulatory roadblock getting in the way of honest Australians wanting to make legitimate updates and changes to their super. Large retail funds are abusing this system to its full potential and wielding super stream requirements like a weapon against members in order to prevent them from taking their funds elsewhere.

Not to be outdone, the ATO is also wielding superstream like a social credit scoring system, refusing to allow members to receive employer contributions, initiate rollovers, rollouts or even set them up to begin with if any members in an SMSF have overdue tax returns or ATO debts in their own name or any entity the ATO deems related to them. This weaponisation of the rules should not occur.

The fact these superstream rules do not apply to retail superfunds is the main reason why this is so pernicious. You can still receive employer contributions, initiate rollovers, and rollouts into retail funds all while having an overdue tax return, tax debt for yourself or in any deemed related entity.

Due to it being wholly unfit for purpose superstream should be shutdown immediately, as it is already rife with the worst excesses of oligopolistic and monopolistic behaviour being exhibited by the retail super fund giants and the ATO.

The SMSF audit industry is also experiencing the same issues with centralisation & regulatory capture as less and less small SMSF audit firms remain each year, all being consolidated into an oligopoly of large SMSF audit firms, which has all the usual expected outcomes, as they arrogantly wield their oligopolistic behaviour toward SMSF trustees for infractions so minor that they should not even be raised.

The superannuation industry is one of the crown jewels of the Australian economy and is the envy of every developed country in the world, similarly to Norway and their sovereign wealth fund. We should seek to protect it at all costs, not tax it and regulate it into oblivion.

SOPHISTICATED INVESTORS

The current sophisticated investor system does not in any way determine an investors sophistication level. All it currently does is assess if they have money or not.

As an accountant i can attest to signing many sophisticated investor certificates for people who qualify and have earnings >$250K per year or assets above $2.5M (eg lawyers and doctors) but have absolutely no investing knowledge or sophistication at all

Conversely there are many individuals with earnings <$250 per year or assets below $2.5M (eg financial analysts) who are extremely sophisticated investors and needlessly miss out due to archaic and outdated rules

Instead an actual test should be put together, in a similar way we do with the drivers licence test, so anyone who can study the necessary material and learn the necessary skills to be sophisticated can be granted a certificate.

These insidious laws are the reason why the rich get richer and the poor get poorer, because the rich have access to higher quality private investments with better returns and the poor are prevented by law from accessing these investments with superior returns and are instead limited to public market investments with lower returns.

It is gaslighting to tell them it is for your own benefit, when it is obvious it is not.

Just because this is also the way it is done in the USA doesn't mean it has to remain that way in Australia, and ASIC can lead the world in this arena by setting the standard to be adopted by other global regulators.

INCENTIVES MATTER, ASIC COMPLIANCE SHOULD BE ENCOURAGED BY MAKING IT EASY & FREE.

Contrary to popular belief most company directors want to do the right thing, but when you make it too difficult or cost prohibitive they start to disregard the rules.

You want companies to be compliant and report changes to their circumstances so that the ASIC database is up to date and correct at all times. So don’t charge them to do it. Put in place positive incentives for them to do what you want.

For this reason there should be no fee charged for the a voluntary windup of a company. Putting up an additional roadblock just adds an unnecessary hurdle. What often occurs, is that because ASIC charges a fee to wind up a company, but if it leaves is annual review fees unpaid for long enough ASIC will deregister the company anyway, some less than ethical directors instead of doing the right thing and lodging the forms and paying the fees to wind up their company at the time, just do nothing and wait for ASIC to close down their companies later due to overdue annual review fees. This is not a desirable outcome and it stems solely from charging an unnecessary and ill thought out fee.

There should be no fee for voluntary late submission of company document changes, if a company forgets to notify ASIC that shareholders have changed or directors have changed and they discover it, they should be encouraged to report these updates, not encouraged to sweep it under the rug to avoid a late lodgement penalty. If these issues are uncovered by ASIC then it would be acceptable to charge a penalty.

Charging a company $491 just to change their company name, when all it is, is an instant update to a database that involves no cost or time to the regulators part is daylight robbery. This should be free to do.

There should ideally be no incorporation fee, or a nominal $10 fee like the in UK (not $597), as this high cost incentivises business owners to delay structuring their affairs correctly due to cost reasons. We want to encourage people to run their businesses properly, not put up roadblocks.

The annual review fee should also not exist, or be a nominal $10 (like the UK) $310 per year is a disincentive to maintain a company structure.

Every single form that is required to be submitted to ASIC should be able to be completed and submitted electronically. The fact that in 2025 there are documents still required to be physically printed, wet signed and snail mailed to ASIC is insane. There is absolutely no reason in this day and age that any form should be required to be completed in wet ink by hand and snail mailed in to ASIC. This just makes ASIC look like a laughing stock on the global stage.

Access to data

ASIC has access to more than enough data, their low performance as a regulator has nothing to do with data access. It has to do with their lack of action and their unwillingness to do what they already know they need to do.

Harmonisation

Harmonisation should be avoided like the plague. Different market types are different for a reason, and each play their own different role, they should be allowed to play to their strengths and not be forced to be rammed into the same set of regulations that don’t apply properly to each.

Harmonisation is akin to taking a round peg (private markets) and a triangular peg (public markets) and trying to ram them both into a square hole (harmonised regulations)

Capital Markets

The reason for the overwhelming shift towards more capital being raised in private markets and less in public markets is a flashing neon sign that the public markets are being over regulated and becoming needlessly cumbersome to operate in.

100% of the blame for this lies at ASICs feet. Remove the garbage complexity and make public markets simpler and more efficient and the problem will solve itself

ASIC has been copying pasting EU and USA regulators who have also been making the same mistakes with predictably the same results, less public companies and more private ones, less IPOs as they’re too onerous, complex and not worth it any more.

Lead by example and if you are as good as you think you are at setting good regulation, then the USA & EU will follow your lead

The bond markets should be as easy to access as the equity markets and should function in a similarly easy way with ticker codes that can be as readily traded via any standard brokerage account such as Commsec, NABTrade, Stake, etc

Voting requirements:

ETF custodians, managed fund providers and superfund trustees should be expressly prohibited from voting without express permission from the underlying owners of the shares. In order to place a vote the custodian and/or trustees should be required to confirm with the underlying owner/member for the way they would like to vote and can only vote as a proxy for this underlying owner/member

They should also be compelled by law to forward on necessary proxy forms so the underlying owners know a vote is happening, and what it is about, and can provide their desired way they want to vote

By way of example NAB Trade was prohibiting shareholders in Tesla voting in their most recent AGM and Vanguard regularly votes on behalf of all the shares it manages, regardless of the fact that they own none of them, they are just managing them on others behalf.

How can Australia's capital markets remain attractive and meet future economic needs

  • Stability both politically and legally. Don't allow a Kathaleen McCormick equivalent derail our entire system and make Australia the next Delaware of the world. Make sure our judges are not activists.
  • The fact our political leaders, of both our major political parties (Labour & Liberal) are far closer to the centre of politics than the fringes, unlike the USA, means less volatility and breeds confidence in our system.
  • Ease of execution, everything should be able to be done online, with minimal input and in the shortest time possible
  • Sensible, succinct, easy to understand and abide by regulations. Less is more.
  • Low cost, you are a government funded regulator, you shouldn’t need to charge fees for law abiding companies, or minor administrative errors, only charge companies for significant breaches of the law

Inspiration

If you're looking for an example of what to try and emulate, Singapore & Dubai are two notable examples, places where capital is flocking to because of good regulators doing an brilliant job.

And if in the future Singapore, Dubai & Australia are mentioned in the same breath as the best places in the world to do business, then you'll know you've done your job correctly.