Australia moves to increase transparency of the ownership of interests in listed entities

Sydney-based James Stewart and Perth based Roger Hawkins of Pinsent Masons were commenting after new substantial holding disclosure laws, contained in the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025, received Royal Assent on 4 December 2025.

The new laws, which build on rules regarding disclosure of beneficial ownership contained in the Corporations Act 2001, are relevant to companies listed on the ASX, including foreign ASX listed companies.

In an explanatory memorandum published alongside the then Bill, the federal government said the new disclosure requirements “will improve corporate transparency by showing who ultimately owns, controls, and receives profits from companies”.

“Increasing the availability of companies’ beneficial ownership information is intended to discourage the use of complex structures to obscure tax liabilities and facilitate financial crimes,” the government said. “Greater levels of transparency will also increase the tools available to regulators and law enforcement in performing their functions and powers (including, for example, the assessment of foreign investment applications and the enforcement of sanctions). It will also support transparency by providing greater access to information to interested members of the public, such as journalists and academics, who play a key role in initiating and encouraging public debate.”

While some parts of the Act have immediate effect, a 12-month transitional period will apply before the new substantial holding disclosure laws take effect.

An important change resulting from the new laws is that entities incorporated or formed outside of Australia which are listed on the ASX, will need to comply with the same substantial holding disclosure and tracing laws that listed Australian companies are required to comply with.

As well as an extension of the disclosure regime to foreign ASX listed companies, one of the most significant changes under the new law is the extension of who will be considered to have a ‘substantial holding’ in a listed company – and therefore be required to disclose as such.

The changes introduce the concept of a person’s ‘deemed economic interest’ in an in-scope company, which takes account of what equity derivatives that person has acquired, even where those equity derivatives only provide an economic interest. This change supplements the existing concept of a person’s ‘relevant interests’ in a company, which gives rise to disclosure obligations when thresholds are met under the existing regime.

One of the main effects of the changes is that a person who has a deemed economic interest in an in-scope company that equates to at least 5% of the company’s total voting securities, is deemed to have a ‘substantial holding’ in the company and is required to disclose as such via a relevant substantial holder notice, generally within two business days of becoming aware of this status.

Information to be disclosed includes the details of any agreement through which the deemed economic interest arises.

The new laws also significantly extend the class of persons who can be subject to Australian tracing laws, requiring them to disclose information about their interests in a listed company if a tracing notice is provided to them. Previously, only registered shareholders and those identified by a prior tracing response could be compelled to provide this information. However, under the new laws any person reasonably suspected of having a relevant interest in, or giving instructions about, securities could be required to respond to a tracing notice.

In addition, regulatory enforcement powers of the Australian Securities and Investments Commission, Australia’s corporate regulator, have been enhanced, including by adding an ability for freezing orders to be imposed on securities when disclosure obligations are breached.

Significant shareholders in ASX listed companies should review their compliance with the new regime in light of the potential consequences of insufficient disclosure, according to Stewart and Hawkins.

Stewart said: “The reforms are designed to close gaps in ownership transparency, addressing concerns that complex financial instruments make it hard to see who truly controls listed companies.”

Hawkins added: “These are very wide-ranging changes to Australian disclosure laws – the most extensive changes since the Corporations Act was introduced 25 years ago. Market participants will need the long lead-time to get ready for the commencement of the reforms.”