By Scott Murdoch

SYDNEY (Reuters) -Australia's corporate regulator on Wednesday urged the government and stock exchange operators to put in place lighter disclosure and governance frameworks in an effort to encourage smaller companies to list their shares on the public markets.

The Australian Securities and Investments Commission (ASIC) said it would support moves to reduce free-float thresholds on public companies to make it easier for foreign firms to list in Australia.

The commission said it would examine easing rules related to when financial forecasts need to be included in prospectuses.

In a new report, ASIC said Australia's public markets were facing structural challenges as companies turned more to private capital to satisfy their funding needs.

It said Australia's listing rules needed to change to ensure the nation's capital markets could attract new listings and remain internationally competitive.

"We do want to encourage growth in public markets," said Joe Longo, ASIC's chairman. "I don’t think anyone really thinks it's a good idea that they wither, that we need public and private markets."

There has been about $2 billion worth of listings in 2025, according to Dealogic data, the most in four years but well below the recent record of nearly $8.5 billion in 2021.

ASIC said it would support the government if it introduced lighter disclosure and corporate governance frameworks for small businesses once they became publicly traded firms.

Under Australia's existing "one-size-fits-all" rules, small companies must meet the same listing rules as multibillion-dollar corporations.

"This may be particularly beneficial with Australia’s significant mining, biotech and other innovative start-up sectors that contribute to the long tail of listings on the ASX," the ASIC report said.

ASIC said it would support an ASX proposal to reduce the minimum free float of listed companies to around 15% from 20% to 25% at present. The change would bring Australia into line with the U.S. and British markets, which have a 10% minimum free float.

(Reporting by Scott Murdoch in Sydney.)