Treasury has finally released the long-awaited consultation paper for the review of the regulatory framework governing managed investment schemes (MISs).  The consultation paper reveals some critical questions which, if reform flows from them, will materially impact all industry stakeholders.

Background

In the October 2022-2023 budget, the Government announced it would ask Treasury to conduct a review of the MIS regulatory framework. Details of what the review would consider were announced in March 2023.

There has not been a comprehensive review of the regulatory framework for some years.

Critical questions 

Some critical questions for industry stakeholders include:

• In relation to the wholesale client tests—
  • Should the financial thresholds for the product value and the individual wealth tests be increased?
  • Should certain assets be excluded when determining an individual’s net assets for the individual wealth test?
  • Should consent requirements be introduced?
• Should responsible entities be required to have a majority of external board members?
• Should there be restrictions on agreements or clauses in scheme constitutions that disincentivise scheme members from replacing a responsible entity?
• Are any changes required to the voting requirements or meeting provisions to replace the responsible entity?

Responses

Responses to Treasury’s consultation paper can be submitted up until 29 September 2023.

McMahon Clarke is making a submission and our Funds Management team can assist with your queries about what the outcome of these questions might mean for you.