Treasury to reform MIS governance

Treasury has opened another review into the $2 trillion managed investment scheme (MIS) sector off the back of the Shield Master Fund and First Guardian Master Fund collapses.

- Karren Vergara

This time, the Enhancing oversight and governance of managed investment schemes consultation focuses on governance and oversight of registered MISs used by retail investors, particularly how ASIC's role can be improved.

Given that imposing additional obligations on responsible entities (REs) of MISs will unlikely prevent failures akin to Shield and First Guardian, Treasury believes proposing to reform “ASIC's ability to detect and respond to poor governance and other scheme risks" will make a difference.

A new MIS regulatory framework will have stricter compliance plan requirements, such as a detailed description of the nature of the MIS and its investment strategy, and information outlining how significant risks will be identified, monitored and managed.