Submission to Australian Government,
The Treasury
Enhancing oversight and governance of managed investment schemes
Equity Trustees’ submission of 27 February 2026 to the consultation on Enhancing oversight and governance of managed investment schemes by the Australian Government (Treasury) recognises that the nature and complexity of the funds management industry is evolving and supports Treasury’s aim of ensuring the regulatory environment evolves to protect investors interests.
Equity Trustees’ submission is based on the following four foundational points:
- Strengthening the requirement of the independence of the RE from the investment manager by requiring a majority of external directors on the RE board
- Increased minimum capital requirements for the RE to at least $2million to properly reflect the responsibility and accountability of the role
- Prohibition on the RE from investing or lending money to companies that are controlled by a member of the RE Board or companies without hindering common industry structures
- Reporting frameworks for all MISs (not just registered MISs) to improve ASIC’s ability to identify poor governance practices earlier.
While the current framework has stood the test of time and generally served the interests of investors well over the last 28 years through a range of market cycles, we support strengthening these four aspects of the system, as well as regular reviews to ensure it remains fit for purpose as markets – and consumer behaviours – change.
Major investment failures in the Australian market over the last two decades, including those involving superannuation have primarily stemmed from failures of REs. Those failures have typically involved REs that have not been independent in nature to the fund manager, have not had appropriate substance of resources and have not properly managed conflicts of interest.
Equity Trustees welcomes and supports opportunities to strengthen the oversight and governance of MISs by enhancing compliance framework requirements, requiring a greater degree of independence for REs, and prohibiting certain related party transactions. We also support the enhancement of reporting requirements could improve ASIC’s ability to identify poor governance practices earlier and reduce the likelihood of future failures.