Red Herring Filing Australia: 2025 Guide for Investors

The prospect of a new company listing on the ASX is always headline news. But before the public can buy in, there’s a crucial document every investor should understand: the red herring filing. In 2025, with increased regulatory scrutiny and evolving investor protections, red herring filings are more than just paperwork—they’re the gateway to transparency in IPOs.

What Is a Red Herring Filing?

A red herring filing is the preliminary prospectus lodged by a company preparing for an initial public offering (IPO). The term ‘red herring’ comes from the bold disclaimer—often in red ink—on the cover page, warning that the document is not yet final. This preliminary version outlines key details about the business, its financials, the proposed offer, and potential risks, but omits critical information such as the final share price and total number of shares offered.

For Australian IPOs, this document is submitted to the Australian Securities and Investments Commission (ASIC) before the final prospectus is released. The red herring is circulated to potential investors, enabling them to make informed decisions or to begin due diligence before the offer is formally open.

• Key features of a red herring filing:
  • Draft financial data and operational summaries
  • Preliminary risk factors
  • Indicative price ranges (not final pricing)
  • Disclosure that the information is subject to change

2025: Policy Updates and Investor Protections

The landscape for red herring filings in Australia has shifted in 2025, thanks to reforms aimed at bolstering market integrity and investor protection. ASIC’s updated Regulatory Guide 228 now mandates clearer disclosure of climate-related risks and digital asset exposure, reflecting the evolving interests of modern investors.

In addition, the Financial Accountability Regime (FAR), effective from March 2025, requires directors and senior management of IPO candidates to personally attest to the accuracy of key statements in the red herring document. This change is designed to increase accountability and reduce the risk of misleading claims slipping through at the pre-prospectus stage.

Recent high-profile IPOs, such as fintech unicorn BrightPay and renewable energy player SunGrid, have put these changes to the test. Both companies’ red herring filings were scrutinised for their handling of ESG (environmental, social, governance) disclosures and the clarity of financial forecasts. The result? More robust Q&A periods and a marked increase in requests for supplementary information during the IPO roadshow phase.

How Investors Should Approach Red Herring Filings

For retail and institutional investors alike, the red herring filing is a vital first look at a company’s prospects—but it’s also a document in flux. Here’s how to approach it in 2025:

• Scrutinise risk disclosures: Pay close attention to new categories of risk, such as cyber threats, supply chain vulnerabilities, and climate transition challenges. ASIC’s guidance now requires companies to address these head-on.
• Understand the numbers—cautiously: Financial data in a red herring is indicative, not final. Watch for wide ranges and footnotes about estimates. Cross-check with industry peers and sector benchmarks.
• Track updates and amendments: It’s common for companies to release supplementary filings or clarifications as feedback comes in. Use the ASX announcements portal and company investor centres to stay current.
• Assess management accountability: Under the new FAR regime, find out which directors are certifying key disclosures. Their track record and reputation may influence your trust in the offer.

Institutional investors, in particular, now often engage directly with IPO candidates’ management during the red herring phase, using digital platforms for Q&A sessions and requesting detailed scenario analyses to test the robustness of forecasts.

Red Herring Filings and the Future of IPOs in Australia

As Australia’s capital markets become more sophisticated, the red herring filing is no longer a tick-the-box compliance step—it’s a litmus test for transparency and governance. With higher stakes for directors and sharper oversight by ASIC, the red herring is now a battleground for trust between issuers and investors.

The reforms of 2025 may raise the bar for companies seeking to list, but they also empower investors with better information and new ways to interrogate the value proposition of every IPO. Whether you’re a seasoned fund manager or a first-time retail investor, understanding how to read and question a red herring filing could be your best defence against IPO disappointment—and your ticket to discovering the next Australian success story.