The Australian Securities & Investments Commission has launched a consultation on draft guidance for pre-hedging that would align Australia’s regulatory approach with the International Organization of Securities Commissions’ final report on the practice. The proposed guide sets out ASIC’s expectations for market participants engaging in pre-hedging and explains how existing legal obligations apply, but it does not introduce new legal requirements. The draft guidance is aimed at market participants including Australian financial services licensees and other entities that undertake pre-hedging in anticipation of client transactions. It is intended to clarify when pre-hedging is appropriate, identify practices that help manage conduct risk and maintain market integrity, and set out the conduct clients should expect. ASIC is also seeking views on whether the final guide should include examples of observed better practices to support implementation. Once finalized, the guide will supersede ASIC’s 1 February 2024 open letter on pre-hedging. ASIC intends to publish the final regulatory guide in Q4 2026 after considering consultation feedback. Submissions on the consultation close on 27 July 2026.

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