ASIC seeking to make Small Business regulatory dealing easier
Introduction
Some recent good news last week for small businesses from Australia’s company regulator, the Australian Securities and Investments Commission (‘ASIC’).
ASIC Commissioner Kate O’Rourke’s speech at the 2025 SBAA International Small Business Summit outlined ASIC's practical steps to reduce the regulatory load on small businesses. Key areas of focus included making regulatory information easier to access through a website overhaul and simplifying interactions with ASIC by expanding digital services and electronic signatures.
Background
It is illuminating that a government body such as ASIC are recognising that Small and Medium Enterprises (‘SMEs’) are often time-poor and resource-stretched. Commissioner O’Rourke states that:
‘unlike the big corporates, they (small business) don’t have legions of support staff to help out. So, it’s often very much a DIY situation and that means time out of an already busy day. Time that could have been spent doing business’.
Per Commissioner O’Rourke’s speech, ASIC want to give small businesses some of their time back and that’s one of the things they are aiming for with their regulatory simplification program. ASIC has a highly active small business team who engage with government agencies, industry associations and small business representatives to share insights, improve regulatory coordination, and minimise duplication and unnecessary regulatory burden for small businesses.
What is defined as a small business?
ASIC defines a ‘small proprietary company’ by contrasting it with a ‘large’ one: you're small if you meet fewer than two of the large company criteria, which are annual revenue over $50 million, consolidated gross assets over $25 million, or greater than 100 employees, with these thresholds applying to financial years starting 1 July 2019 or later.
Key points from ASIC’s 4 December presentation
ASIC recognises that small businesses are often time-poor and resource-stretched, and ASIC is working to ease some of the pressure through their regulatory simplification program.
This includes making ASIC guidance and information clearer, simpler and easier to access and improving their registry services for the millions of small businesses who rely on them.
While climate reporting obligations apply mainly to larger entities, over time they will have some impact on some small businesses and ASIC is working to help businesses prepare. Note: many small businesses form part of the value chains of larger businesses. That means they may need to engage with climate reporting considerations in the future, even though they do not have any direct climate reporting obligations. So, if a small business has a customer or supplier that is a large business or financial institution, they may request further information to help them meet their reporting obligations.
Improving access to regulatory information – 9000 pages gone!
To improve access to regulatory information ASIC has redesigned their website. ASIC acknowledged that finding the right information on its website could be ‘hit and miss’ - so a website overhaul has occurred.
ASIC has improved the navigation, put in a better search function and removed more than 9000 pages of duplicated content. This should mean that users will be able to access the information they need more quickly, and be more be confident all the relevant information can be found easier.
Making it easier to interact with ASIC
ASIC has a major multi-year program of work underway to improve its business registry related technology and processes. Through that program, known as ‘RegistryConnect’, ASIC are working to stabilise, secure and modernise the ASIC registers. Importantly, from a user’s perspective, this will enable simpler and more reliable interactions with ASIC and improve the quality and integrity of registry data.
Climate reporting
New mandatory climate-related financial disclosure requirements came into effect just over a year ago. These requirements won’t directly apply to any small businesses. However, many small businesses form part of the value chains of larger businesses.
ASIC is aware that this means some small businesses may need to engage with climate reporting considerations in the future, even though they don’t have any direct climate reporting obligations.
So, if a small business has a customer or supplier that is a large business or financial institution, they may request further information to help them meet their reporting obligations. For example, that large business or financial institution may need to report on their energy usage, and may ask for records, such as electricity bills, so they can create a full picture.
To help small businesses understand their reporting obligations, ASIC are preparing educational materials that will assist those who are interested to understand, for example, the basics of climate change, what climate-related physical risks and transition risks are, case studies on identifying climate-related opportunities, and an introduction to emissions accounting.
Conclusion
ASIC should be applauded for seeking to reduce the regulatory burden on small businesses. Reducing ‘red tape’ and regulatory burden significantly boosts productivity by freeing up time and capital that would otherwise be spent on compliance, enabling greater focus on core business functions, innovation, and growth. As noted by ASIC, small businesses lack the resources of larger firms to manage complex compliance, making the burden disproportionately high for them.
Key productivity benefits of reducing ‘red tape’ and regulatory burden can include:
Reduced Compliance Costs: Small businesses spend less money on navigating complex rules, reporting requirements and legal advice. This directly reduces operational costs and improves efficiency.
Time Savings: Business owners and managers spend less time on paperwork and administrative tasks, allowing them to focus on productive, value-adding activities like developing new products, serving customers, and expanding their business.
Increased Investment and Capital Reallocation: Freed-up capital, previously tied up in compliance, can be reinvested into the business for research and development, purchasing new equipment, or hiring more people.
Enhanced Innovation and Dynamism: A less restrictive environment encourages entrepreneurship and innovation, as businesses have more flexibility to experiment with new processes and market strategies. This also lowers barriers to entry for new firms, increasing overall market competition.
Greater Flexibility: Businesses gain more autonomy to make efficient operational decisions without excessive bureaucratic constraints.
Improved Resource Allocation: Simplifying or harmonising regulations, especially across different jurisdictions, helps prevent fragmented rules from disproportionately burdening small businesses and allows for more efficient use of resources.
The SME sector is the ‘backbone’ of the economy in terms of sheer number of businesses (over 99%) and total employment (around two-thirds of the workforce). SMEs account for just over half (around 55%) of Australia's total GDP. Small businesses alone contribute approximately one-third of the nation's GDP.
Ultimately, ‘right-sized’ regulation helps unlock the potential of Australian small businesses to continue to be an engine for economic growth and opportunity creation.
Andrew McNeil, Fellow of Chartered Institute for Securities and Investments
https://www.andrewsmcneil.com/
https://www.yarmouthgroup.com/
https://www.asic.gov.au/about-asic/news-centre/speeches/time-to-get-on-with-business/