Something strange has been happening in many financial markets around the world: the number of companies listed on public stock exchanges has been steadily declining.

Some have been taken over by private companies. Others are deciding to remain private rather than list on a stock exchange. At the same time, private markets – where investors back private companies that are not listed on a stock exchange – have been expanding.

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), is worried about this trend.

Public markets are the main way everyday investors can make investments. They’re open to everyone and are far more transparent than private markets, making them easier to supervise and regulate.

ASIC has raised concerns that strict rules against advertising an initial public offering before a prospectus has been released may be making it too hard for companies to gauge market interest.

On Tuesday, ASIC announced a proposal to change the rules, which would allow companies to advertise their share offers before they issue a prospectus – under some tight constraints.

This could make public markets easier to access and more attractive for companies looking to........

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