5 Things you need to know about the proposed MIS reforms

ASIC’s Consultation Paper 388: Net tangible assets requirement for responsible entities proposes changes to net tangible asset (NTA) requirements for REs, including increasing the concessional minimum threshold (potentially up to $1 million), applying minimum NTA requirement on a per-scheme basis, and lifting the current $5 million cap on the fund assets limb.  

These changes are intended to improve financial resilience, particularly in supporting scheme wind-ups and transitions. However, they may materially increase the cost of operating an RE and drive scale or consolidation among smaller operators.

In Consultation Paper: Enhancing oversight and governance of managed investment schemes, Treasury is proposing RE boards comprise a majority of independent directors and the compliance committee model be removed. This represents a fundamental shift, particularly for founder-led and vertically integrated groups. 

While aimed at reducing conflicts, it raises practical questions around director availability, cost and whether independence alone improves oversight.

Treasury also proposes more prescriptive and risk-focused compliance plans, with stronger audit requirements and greater transparency around oversight.   

Compliance plans are expected to evolve from static documents into active risk management tools, requiring ongoing monitoring and testing rather than periodic review.

Treasury has proposed a broad prohibition on related party transactions, subject to limited exceptions. This would be a significant departure from the current framework and could disrupt common industry structures, particularly in property and private markets. 

The challenge will be balancing conflict management with the commercial reality that many MISs rely on related party arrangements.

Proposals include enhanced data reporting and event-based notifications, as well as information sharing around investor switching activity. While intended to support earlier detection of risk, industry feedback suggests the issue may be less about data availability and more about how effectively existing data is used.

Taken together, these reforms reflect a clear regulatory direction: more capital, stronger governance and increased supervision. The key question for industry participants is whether this will translate into better investor outcomes or a more complex and costly operating environment.