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A new law aimed at easing the compliance burden for dually listed ASX and US stock exchange companies has highlighted the influence Australian lawyers can wield on the global stage.
In late May, the Securities and Exchange Commission (SEC) in the United States issued an order that exempted directors and officers listed on the Australian Securities Exchange (ASX) from the duplicate filing requirements under section 16(a) of the US Exchange Act.
Similarities were found in section 250(g) of Australia’s Corporations Act 2001 and ASX listing rule 3.19, which provides a requirement for directors of covered issuers to promptly report initial holdings and any changes in beneficial ownership of the issuer’s securities.
The exemptions were made possible under the Holding Foreign Insiders Accountable Act, effective from March 2026.
In a letter to the SEC and phone call with the chief of the SEC’s Office of International Corporation Finance, Rimon Law partner Andrew Reilly argued the rules of the ASX “impose a substantially similar requirement on directors of ASX-listed companies”.
The Sydney-based lawyer told Lawyers Weekly it would reduce the compliance burden on directors of ASX-listed companies that are dual listed, or are considering listing, on the US stock exchange.
However, he clarified that section 16(a) and ASX rule 3.19 may be substantially similar, but are “not the same”, and reporting individuals will need their own EDGAR codes to file reports via the SEC’s system.
“This demonstrates that the SEC is willing to listen to lawyers ‘Down Under’. Even though we’re far away, they can hear us, and I look forward to working with the SEC in creating some mutual recognition between the US and Australia,” Reilly said.
Moving forward, Reilly said he believes there will be greater regulatory recognition between jurisdictions stemming from last year’s SEC Concept Release on Foreign Private Issuer Eligibility.
Following on from several developments within the foreign private issuer (FPI) population since its last review, the SEC requested submissions on whether the current definition could be revised so it better represents the issuer’s interests and accommodations.
In a response letter shared with Lawyers Weekly, Reilly advocated for a mutual recognition system between Australia and the US, including with respect to broker-dealer requirements in soliciting institutional investors and secondary capital raisings.
The letter set out that the SEC entered into a mutual recognition arrangement with the Australian Securities and Investments Commission (ASIC) for broker-related regulatory exemptions.
Reilly wrote that the global financial crisis diverted attention, but “believe[s] now is the time to resume mutual recognition efforts”.
“Resurrecting the 2008 proposal, we suggest that the commission consider permitting Australian brokers with an Australian Financial Services License to effect transactions with ‘major US institutional investors’ … without relying upon a chaperoning arrangement with a US broker-dealer under wholesale clients’ … without reliance on an Australian broker,” Reilly said.
Reilly also suggested the SEC permit ASX-listed companies to extend dividend reinvestment plans to US shareholders.
He said many investors, and especially those seeking a retirement income, prioritise a regular dividend stream over potential capital gains. The dividend payout ratio “is almost twice as high in Australia”.
“The tax treatment of dividends plays a role in this disparity as dividends paid by Australian companies are not subject to Australian income tax for securityholders if an Australian company has paid Australian income tax on the related profit,” Reilly said.
Reilly argued for “clear exemptions” from the United States registration requirements for Dividend Reinvestment Plans (DPRs).
Counsel could advise an ASX-listed issuer that only US securityholders who are qualified institutional buyers (QIBs) should be permitted to participate in a DPR in transactions exempt from the registrations under the Securities Act, Reilly added.
They may also advise that any such US securityholder should complete and return a US investor certificate that addresses customary US securities law matters for private placement.
“Excluding US persons from participating in a DPR results in unequal treatment that disadvantages US investors,” Reilly said.
“This is particularly inequitable and disadvantageous given that US investors are the most significant foreign investors in ASX-listed equity securities.”
Rimon Law is advising more Australian companies seeking a listing on the US stock exchange “than ever before”, Reilly said. Although it has occurred around the time of the SEC exemptions, the partner clarified it was not principally motivated by them.
“Instead, it’s driven by Australian companies with critical mineral projects, particularly those with projects in the United States, as US investors appear to value such companies more than Australian investors. This reflects, in part, a focus of the Trump administration on critical minerals,” Reilly said.
