The proposals respond to ongoing governance concerns and recent high-profile scheme collapses, most notably the Shield Master Fund and the First Guardian Master Fund. Together, they placed more than $1bn of investor funds at risk. The Australian government is considering reforms aimed at reducing consumer harm, strengthening responsible entity (RE) accountability, and improving Australian Securities & Investments Commission’s (ASIC) visibility over scheme activities, superannuation switching, and sector-wide risks. Treasury is seeking feedback on these proposals, with submissions due by 27 February 2026.

The paper sets out 6 consultation points for feedback from the industry

1. Strengthening the compliance framework

• Stricter compliance plan requirements, including detailed scheme descriptions and significant risk controls.
• Liability for compliance plan breaches limited to material contraventions.
• Mandatory use of existing audit and assurance standards for compliance plan audits.
• REs to notify ASIC of appointment or resignation of compliance committee members.

2. Majority of external directors on responsible entity boards

• RE boards would be required to have a majority of external directors, eliminating the alternative option of a mandatory compliance committee.

3. Prohibition on related‑party transactions (with limited exceptions)

• REs would be prohibited from investing in or lending to related entities unless an exception applies. This responds directly to identified misconduct in past MIS failures.
• A potential solution outlined would be to outsource the RE function such that it is independent of the investment manager.

4. New framework for financial resource requirements

• ASIC considering higher net tangible asset (NTA) requirements.
• Treasury is seeking feedback on whether these requirements should be set out in legislation rather than in ASIC instruments.

5. Increased ASIC MIS data collection powers

• New recurrent and event‑based data reporting to address current gaps in MIS‑level visibility.

6. Alerts to ASIC about superannuation switching

• Mandatory alerts from superannuation trustees regarding suspicious switching activity, aimed at early detection of misconduct.

Who is impacted

How SW can help

SW brings deep financial services expertise with a strong focus on funds management and regulated investment structures. We work closely with responsible entities, investment managers, and trustees to navigate complex regulatory change and evolving governance expectations.

Our team can assist in assessing the impact of the proposed reforms on your governance framework, board composition, compliance plans, and related party arrangements. We also advise on financial resource requirements, capital implications, and enhanced reporting obligations, helping you strengthen risk management and internal controls in line with heightened regulatory scrutiny.

With integrated audit, assurance, risk, and advisory capabilities, we provide practical, commercially focused guidance to help you respond effectively to these reforms.

Contributor

James Serpell

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The Australian property and construction sector’s growth has softened due to rising borrowing costs and supply chain disruptions. Commercial developments have been impacted through decreased demand for office spaces and the digitalisation of the retail market.

Infrastructure and construction sectors can be volatile, so you can rest easy knowing in some of the most important areas of your business, such as taxes, structuring, cash flow and funding, SW have the expertise to assist you to add value and drive your strategy.

Our property & infrastructure experts offer a full suite of back office support, advisory, structuring, modelling and compliance services to the property and infrastructure sector.   

Whether you’re a developer, builder, investor, financier or manager, we’ll help you navigate the challenges.

Our Property & infrastructure services

Spotlight | Property Forum #back2thefuture

Property and economics are often cyclical in nature. For this reason, experts often use the past to predict a future outlook. However, with global disruption, the level of uncertainty has increased drastically, with many experts uncertain if we can look back to predict our future.

For this reason, we brought renowned property industry experts together to take a deep dive into the changing landscape in Australia, the impact this has on the future for property and what people and businesses should be considering in order to prepare.

Emerging Developers series (EDS)

Taking the lead to support tomorrow’s leaders, our Emerging Property Developers series is now delivered virtually. This series has been tried and trusted by the industry for over 8 years and is designed to walk you through the property development process from start to finish.

An interactive four-part program facilitated by our property specialists is delivered to a limited group of emerging property professionals. Each session features guest industry experts who provide strategic insight into property development and key developer issues, from tax structuring to design and construction.

Industry Associations & Memberships

Our significant involvement in the property industry mandates an active involvement in current tax and accounting issues that impact your sector. We are also involved in consultative processes, making submissions to Treasury and/or the ATO. Other key involvement includes:

• Various Property Council of Australia and Victoria tax committees and forums
• The National Tax Liaison Group Trust Sub-Group, which until recently was the peak consulting
  body on which tax matters concerning trusts were discussed with senior officials at the ATO.

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