Proposals to improve regulatory visibility 10 min read
On 23 September 2026, Treasury released its consultation paper on proposals to improve regulatory visibility of the managed investment scheme (MIS) sector through enhanced data collection (the Consultation Paper).
The Consultation Paper comes in response to the recent First Guardian and Shield master fund collapses, which Treasury believes have illustrated gaps in regulators' visibility of the MIS sector and reinforced the importance of adequate, timely and reliable data to support effective supervision. These concerns echo those raised by ASIC as part of its recent private markets review. ASIC cautioned that it does not have sufficient data (particularly on the wholesale funds market) to adequately regulate the sector, especially when compared to the reporting obligations of fund operators in other comparable jurisdictions.
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Why are the changes proposed?
According to the Consultation Paper, current data collection captures only fragmented and limited information about the MIS sector. This reflects the fact that different regulators (such as ASIC, APRA, the ATO and the ABS) each collect MIS-related data for different purposes, at different levels (both MIS-level and responsible entity-level), across different segments, using different definitions and methodologies. As a result, Treasury believes that ASIC's regulatory efforts are held back by the fragmented, incomplete and insufficiently granular data it receives, and that this has a direct bearing on its ability to supervise the MIS sector.
Treasury's proposed framework is intended to address these issues by streamlining data collection and improving ongoing regulatory visibility to help identify emerging issues earlier.
It is unclear from the Consultation Paper whether the proposals are intended to be implemented through amendments to the Corporations Act 2001 (Cth) (Corporations Act) or regulations, ASIC instruments or administrative changes to existing data collection powers.
Proposal 1 – Enhanced registration data for registered MISs
This proposal involves expanding the information collected by ASIC at the point of scheme registration for MISs to provide a better understanding of the scheme's intended risk profile.
It is proposed that the following data could be collected on registration, which is significantly broader than the information currently required to be provided to ASIC:
- MIS details: name and other identifying information, including manager identifiers, scheme details and whether publicly listed;
- Investment profile: investment strategy and objectives, open or closed status, legal and fund structure (including cross-investments), key counterparties and related counterparties, expected leverage and liquidity information;
- Operations: whether unitised or non-unitised, including class terms and conditions, valuation approaches, performance benchmarks, withdrawal conditions and fees;
- Governance: details about board composition and auditor of compliance plans, as well as director declarations; and
- Risk and ESG: information about borrowing and use of derivatives, compliance obligations such as net tangible assets requirements, and ESG commitments.
Responsible entities would be subject to an ongoing obligation to keep this information up to date, consistent with the 'material changes' approach that currently applies to product disclosure statements under the Corporations Act.
Both ASIC and the ABS would be able to rely on the same data for their respective roles, reducing the need for separate data collection processes.
Our view
- The Consultation Paper does not propose any changes to the circumstances in which ASIC may refuse to register a scheme, despite the additional information that would be provided to ASIC at the time of scheme registration. It is therefore not clear if ASIC would be expected to review the additional information in determining whether to register the scheme, or if this would be provided to ASIC purely for data collection purposes.
- As a practical matter, if this proposal were to be adopted, details about the scheme that would often be finalised after the scheme's registration (for example, at the time that the scheme's product disclosure statement is prepared) would need to be confirmed upfront when the scheme is first registered. This will have an impact on project timetables, as scheme registration may need to be delayed until these details are known.
- In our experience, many MIS collapses over recent decades have involved schemes that are not structured as unit trusts (that is, contract-based or enterprise schemes). Therefore, we think it is important for scheme registration applications to include an explanation of the 'scheme property' of the MIS that will be held on trust by the responsible entity in accordance with section 601FC(2), as well as any contractual arrangements with scheme members. These factors are relevant in determining whether the scheme complies with relevant statutory requirements. It is not clear whether the broader information proposed to be collected at registration (as noted above) is intended to capture this detail, notwithstanding that the proposed categories refer to 'legal and fund structure' and 'key counterparties'.
- In relation to the proposed ongoing obligation to keep data provided at scheme registration up to date, it is not clear whether this would be a disclosure obligation to ASIC (which could instead be implemented via a modified form of Proposal 2 below) or a disclosure obligation to scheme members (which would seem unnecessary given existing continuous disclosure obligations under the Corporations Act – see our comments below in relation to those obligations).
- More generally, we think the finalised categories of additional information should be as clear and specific to minimise uncertainty and the risk of an unintended breach. The current proposal describes the categories of information at a relatively high level, without further detail as to the specific items that would need to be disclosed within each category. Clear and specific categories would reduce uncertainty for responsible entities in preparing registration applications and would limit the risk of unintended breaches (see our discussion below about safe harbour carve-outs).
Proposal 2 – Recurrent data collection for registered MISs (and possibly managed accounts)
Treasury views registration data alone as insufficient because it provides a point-in-time analysis and does not capture changes in risk exposure over time. As a solution to this, Treasury is also proposing to introduce recurrent data collection for registered MISs.
Treasury's proposal is for the following information to be collected on a quarterly basis:
Registered MISs:The MIS-level data would include:
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Managed accounts:Managed accounts structured as registered MISs, such as separately managed accounts (SMAs), would be captured by the recurrent data collection at the MIS-level. Treasury is also considering additional portfolio-level reporting for these MISs, as well as extending this to managed accounts offered to retail clients that are unregistered because they are relying on ASIC relief (such as managed discretionary accounts (MDAs) and investor directed portfolio services (IDPSs)). The portfolio level data would include:
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It is intended that only one government agency, being ASIC, would collect the data from industry and share it with other relevant agencies. As such, this proposal would result in the retirement of several existing ABS collections on MIS.
This quarterly data collection requirement would operate in addition to existing continuous disclosure obligations to members of MISs, as well as the proposed obligation (announced by Treasury in August) for responsible entities to notify ASIC when they freeze or limit an investor’s ability to make redemptions.
Our view
- Although recurrent data collection for registered MISs is an important tool for ASIC to monitor the MIS sector, we believe any such measure will need to be implemented carefully to ensure that the policy objectives and benefits outweigh the compliance costs on industry.
- For example, the interaction between any recurrent data collection program and the existing continuous disclosure obligations with which responsible entities are required to comply will need to be considered. The existing continuous disclosure frameworks could be used to ensure that ASIC has access to the data it requires to enhance its understanding of risks and trends in the MIS sector. There are currently separate continuous disclosure regimes for unlisted MISs depending on whether the scheme has more or less than 100 members. The way these regimes currently operate (including through the application of Regulatory Guide 198 – 'Unlisted disclosing entities: Continuous disclosure obligations') can result in inconsistent outcomes because there are different disclosure tests under each regime and disclosure to ASIC may or may not be required. In our view, if a new quarterly data collection requirement is to be introduced, at the same time the existing continuous disclosure regimes should be clarified, simplified and streamlined to avoid responsible entities needing to comply with multiple overlapping and inconsistent ongoing disclosure obligations.
- We think the proposal to extend the data collection regime, particularly at the portfolio level, to managed accounts (including SMAs and IDPSs) is unlikely to be feasible given that much of this information will need to be sourced from a large number of underlying advisers and funds to which these platforms provide access and will vary based on the underlying mandate or fund. This concern also applies to fund-of-funds and access funds that are structured as registered or unregistered schemes.
- Given the volume and frequency of the information to be reported under Proposal 2, we think it is reasonably foreseeable that responsible entities will (especially when the proposal is first introduced) inadvertently submit incomplete or inaccurate data notwithstanding their best efforts to comply. It is also not clear from the Consultation Paper where such breaches would contravene misleading or deceptive conduct provisions (or any other provision for that matter). As such, we would propose that Treasury consider a specific safe harbour carve-out confirming that honest mistakes or non-material errors in quarterly data submissions will not expose responsible entities to enforcement action, at least during an introductory period.
Proposal 3 – Extending data collection to unregistered MISs offered to wholesale investors
While the Consultation Paper is focused on the registered MIS sector and retail investors, Treasury considers some oversight of unregistered MISs offered only to wholesale investors is required. Treasury points to the connections between registered and unregistered MISs and the increasing significance of the unregistered MIS industry (with approximately $1 trillion in assets) in Australia.
Treasury's proposal contains two parts:
- Proposal 3A: A notice requirement, which would require operators of unregistered MISs to notify ASIC at the time of the commencement and cessation of each unregistered MIS. At the time of commencement, baseline information would be supplied to ASIC such as the name of the MIS, the name of the investment manager, any other AFS licensee involved in its operation or management, intended cross investments between schemes and the intended investment strategy. This would apply to Australian-domiciled unregistered MISs and certain foreign MISs marketed to Australian wholesale investors, with transition arrangements for existing MISs; and
- Proposal 3B: Collection of limited and targeted recurrent data. Despite being described as limited and targeted, the type of data that is listed in the Consultation Paper largely mirrors the data proposed to be collected for registered schemes under Proposal 2. The exceptions are distribution channels and cross-investments. Proposal 3B also includes an additional category of data relating to source of distributions.
Our view
- This represents the most significant proposal under the Consultation Paper, departing materially from the current legislative framework which does not regulate unregistered MISs (other than in respect of their licensed operators / managers).
- The Consultation Paper refers to the growing interconnectedness between registered and unregistered MISs, which increasingly operate within the same broader investment ecosystem with linkages arising through cross-investment arrangements, common service providers, distribution channels and exposures through superannuation and investment platforms. However, the proposals are not limited to unregistered MISs that operate within this ecosystem.
- The definition of 'managed investment scheme' in section 9 of the Corporations Act is broad. It captures a wide range of funds, including closely held 'club-style' funds, capital partnership structures and unregistered MISs which form part of stapled joint venture structures, each of which typically has institutional (often offshore) investors that have no nexus with Australian retail investors in registered MISs. As currently proposed, this obligation would also extend to those funds.
- Industry should be concerned that these proposals do not impact the global competitiveness of the wholesale fund formation market in Australia. In particular, any notification requirement under Proposal 3A should occur post-formation, rather than operating as a de facto regulatory review period, and ASIC should provide assurance that any notifications will be kept confidential and will not be reported publicly.
- Given the breadth of structures and asset classes that could be captured, in our view the obligation to report recurrent data on the unregistered MIS sector under Proposal 3B will lead to an unworkable, complex and unduly expensive reporting regime, particularly having regard to fund structures which traverse multiple jurisdictions (see below) or corporate forms.
- The Consultation Paper states, without further detail, that Proposal 3A would extend to 'certain foreign MISs marketed to Australian wholesale investors'. In our view, this aspect of the proposal is not workable without a clearly defined and appropriately limited jurisdictional nexus. It could otherwise capture offshore wholesale funds that are offered to institutional investors globally, including Australian institutional investors such as superannuation funds, potentially discouraging those funds from being offered in Australia and reducing investment opportunities available to Australian wholesale investors.
- If the ABS requires data in relation to unregistered MIS for national statistics purposes, including GDP, we think the ABS should directly obtain that information from relevant entities (including funds) for those purposes.
- The Consultation Paper points to other jurisdictions (such as the US, EU and UK regimes) as support for extending data collection to unregistered schemes. As noted by ASIC in a report commissioned late last year, Report 821 – 'Private capital market reporting: Global practices and lessons', these jurisdictions already operate comprehensive disclosure regimes under which private capital funds are subject to broad registration and licensing requirements, typically under a single legislative instrument. Critically, each of these regimes tends not to be confined to retail funds, which is distinct from the current Australian regime which does not directly regulate wholesale funds in the same way. It is therefore not clear from the Consultation Paper what legislative basis would be used for this proposal in Australia, or how it would be implemented, given that Australia has no equivalent broader statutory regime for wholesale funds.
Further details are available on the Treasury Consult hub and in the Consultation Paper. The consultation closes on 23 October 2026.
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