Australia’s regulatory landscape will see the most extensive and fundamental reform to disclosures since the Corporations Act was introduced 25 years ago and is a major shift towards international transparency standards. ASIC’s Consultation Paper 387 (CP 387) reshapes how beneficial ownership and substantial holding disclosures are assessed, with a clear focus on improving transparency around economic exposure and control, due for introduction on 4 December 2026.
The key change is a fundamental expansion of what constitutes a reportable interest. Disclosure will no longer be limited to direct holdings or physically settled instruments; it will now include the economic interest arising from cash-settled derivatives which were previously often excluded from calculations including both long and short exposures. This increases the complexity of compliance and reporting obligations.
Although increasing complexity of reporting, the reform simplifies disclosure with the consolidation of forms 603, 604, and 605 into a single, unified Substantial Holding Notice.
Proposed civil liabilities and enforcement risks for substantial holding disclosure penalties have DOUBLED increasing significantly, including up to 4 years’ imprisonment for certain failures, a shift away from requiring ASIC to prove a “fault element” (like intent or negligence) in civil penalty proceedings. This makes even inadvertent breaches actionable by the regulator.
In tandem, ASIC looks to address the “equivalent foreign requirements exclusion,” which would impact how foreign-registered entities listed in Australia disclose their interests. A modernisation is being seen with ASIC moving toward a web-based portal for submissions, potentially replacing the submission of PDFs.
Artius Global: This is a radical shift towards international transparency standards with mandatory inclusion of both physically and cash-settled equity derivatives. ASIC is focussed on principle-based methods for determining “deemed economic interests” and the use of a “generally accepted standard pricing model” for valuing derivatives increases the complexity and depth of information. This closes “regulatory gaps” that were used to obscure tax liabilities and true control. Many activities previously considered “private” or “hidden” will be subjected to mandatory reporting. Regarding penalties and the fact that regulators are taking this more seriously, the Takeovers Panel currently issues “unacceptable circumstances” declarations and remedial orders when they find non-compliance. However, since these actions are generally non-punitive, we expect a shift toward more stringent penalties too. Notably, the Australian courts are following in-principle a global shift toward unlimited civil compensation. Overall, shareholding disclosure is taken much more seriously, and we expect market participants to re-evaluate their internal processes. With the Consultation Deadlines Submissions due on 21 April 2026, we expect final regulations to be concluded in upcoming weeks.
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As like most regulations, non-compliance leads to penalties, fines and notably an important differential responsible officers can face civil and criminal liabilities in addition to remediation costs and loss of reputation.
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