Lifting the veil: Treasury's push for greater transparency in the managed investment scheme sector

Overview

Our observations

Proposal 1 - Enhanced registration data for registered MISs

• Proposal 1 expands the information collected on registered schemes at MIS registration to give ASIC a clearer baseline view of each scheme's risk profile. Proposed data fields include investment strategy, fund structure (including cross-investments), counterparties, leverage and liquidity expectations, valuation approaches, withdrawal conditions and fees.

• REs would need to keep registration data current, with updates required only for material changes. For most REs, this should be manageable as the information largely mirrors what is already compiled for PDS and internal governance purposes.

Proposal 2 - Quarterly recurrent data collection for registered MISs and streamlining of existing reporting arrangements

• Proposal 2 introduces quarterly data reporting for registered MISs at the individual scheme level, being a significant uplift from the current annual reporting regime. The proposed data fields cover scheme attributes and characteristics including assets under management and investor attributes, asset allocation, leverage, distribution channels, redemption information, income and expenses, investor flows, and cross-investment between schemes. Treasury is also considering extending reporting to the managed accounts sector given "its growing scale and potential to become an emerging risk".

• Building or updating the systems infrastructure to produce standardised, quarterly, scheme-level data will require material investment, particularly for smaller REs and schemes with illiquid or hard-to-value assets. A positive development is that Treasury is proposing to retire several existing ABS collections on MISs and have only one government agency (presumably ASIC) collect the data from industry to share with other relevant government agencies.

Proposal 3 - Collect limited and targeted additional data on wholesale funds

• For the first time, the Government is actively canvassing compulsory data collection on the unregistered MIS sector.
• Under the Corporations Act, a MIS offered exclusively to wholesale investors is exempt from the ASIC registration requirement. Its operator must generally hold an AFS licence but is otherwise subject to significantly fewer obligations than the RE of a registered scheme. As a result there is no obligation to report on the commencement or cessation, or financial performance throughout the life of the scheme.
• Proposal 3 has two parts as set out below.

Proposal 3A – Notification at commencement and cessation

• Operators of unregistered MISs would be required to notify ASIC when a fund commences or ceases, and in doing so provide ASIC with baseline information such as: the scheme's name, its investment manager, intended cross-investments, any other AFS licensees involved in its operation, and the fund's intended investment strategy.
• The obligation would extend to Australian-domiciled unregistered MISs and certain foreign MISs marketed to Australian wholesale investors, with transition arrangements for existing funds.

Proposal 3B – Limited recurrent data collection

• The more radical change is Proposal 3B which would require unregistered MISs to provide targeted periodic data covering information that could include scheme attributes, unit or member interest data, asset allocation, source of distributions, redemptions, leverage, income, expenses, investor flows, and assets and liabilities by type and counterparty.

• This is the most significant element of the consultation paper. Unlike Proposals 1 and 2, the proposal would create new regulatory oversight over a sector the Corporations Act 2001 deliberately exempts from the obligations currently set out in Chapter 5C.
• Treasury's stated rationale for regulating unregistered schemes is the growing interconnectedness between registered and unregistered MISs. However, given the triggers for the consultation and proposed reforms were the collapse of certain registered schemes such as the First Guardian and Shield Master Funds, and Treasury’s stated objectives to support ‘risk-based supervision’ and to reduce ‘consumer harm’, it is unclear how regulating unregistered schemes and wholesale funds (where investors are typically more sophisticated) proportionately advances the overall policy objective of risk-based supervision and reducing consumer harm. We expect this aspect of the consultation will attract significant feedback.
• The data fields proposed for unregistered schemes under Proposal 3B substantially overlap with those proposed for registered schemes under Proposal 2. Stakeholders may wish to consider whether to submit that it could be appropriate to first trial the new reporting framework on registered schemes.
• For private equity, venture capital and other private markets closed-end funds, quarterly reporting on asset allocation and leverage will involve significant estimation and judgement. Valuations and quarterly carrying values may not reflect realisable net asset value (NAV). Given this, provision of those details may provide limited insight into actual fund asset performance. Treasury recognises this in the consultation paper and has sought feedback on "the viability and worth of such collections".
• It is also unclear how Treasury and/or industry would propose to deal with the issue of confidentiality – i.e. managing the risk that the data being sought could reveal or give insight into proprietary investment strategies, raising commercial sensitivity concerns.

Wholesale fund operators generally

Proposal 3 is a material development that wholesale funds should consider making a submission on. That is particularly the case for private equity, venture capital, private credit, real estate, infrastructure and other strategies operated through unregistered MIS structures given the longstanding premise – that wholesale investors are sophisticated, capable of protecting their own interests, and should not bear the cost of the regulatory apparatus applied to retail products – is being recalibrated in favour of systemic visibility.

Wholesale operators would need to notify ASIC of each fund's existence, provide baseline details, and deliver data across financial and operational metrics (potentially, on a quarterly basis). For many funds, this means that reporting systems and capabilities need to be newly established.

Private credit fund managers

Private credit funds (including wholesale funds) are already under heightened regulatory scrutiny, with ASIC designating poor practices as a 2026 enforcement priority. The data collection proposals add a further compliance layer alongside ASIC's ten private credit principles (see REP 823), updated conflicts guidance (see RG 181), and its catalogue of key legal obligations for private credit funds.

REs of registered MISs

Proposal 2 introduces quarterly scheme-level reporting that materially exceeds the current annual regime, which is reported at the RE level rather than individual scheme level. On the other hand, the proposal to retire several longstanding ABS forms indicates an attempt to reduce the compliance burden on the industry. REs should engage actively in that process to ensure the new framework promotes efficient reporting obligations.

ASX-listed fund managers

ASX-listed funds already operate under continuous disclosure, periodic reporting, net tangible assets (NTA) obligations and ASIC's regulatory guides. The new quarterly data fields nonetheless go beyond existing requirements and will require careful assessment against current reporting workflows, in particular, those which require the managers to disclose the source of investor funds, cross-investments, and unit-level related party data.

Superannuation trustees and investment platforms

The consultation's focus on source of investor funds warrants particular attention. Treasury is seeking to understand whether MIS investments originate from individuals, SMSFs, APRA-regulated superannuation funds, or platforms and wealth managers. This forms part of the broader response to the super-switching practices that facilitated the First Guardian and Shield losses.

The proposed data fields are extensive and will require support infrastructure, such that administrators, custodians and platform operators should be assessing the obligations that may arise if the consultation paper's proposals are implemented and map those obligations against their existing systems to determine what uplift may be required. These entities should also consider making submissions to outline the operational challenges associated with the proposals.