Where things stand
On 18 March 2026, ASIC released Consultation Paper 388 (CP 388), seeking views on options to increase the net tangible assets (NTA) requirement for responsible entities of registered managed investment schemes and other fund operators.
The NTA requirement has remained unchanged since 2013. In light of recent scheme collapses, ASIC is reviewing the NTA requirement to ensure it continues to meet its policy objectives. These include adequate financial resources, entities of substance and the ability to facilitate orderly transitions or wind-ups if they fail.
Current regulatory requirements
Responsible entities must comply with the NTA requirement as part of their obligation to have adequate resources under section 912A(1)(d) of the Corporations Act 2001 (Cth). The NTA requirement for responsible entities is currently set out in ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647.
The current framework includes:
- Non-concessional requirement: Minimum NTA of the greater of $10 million or 10% of average revenue.
- Concessional requirement: Where exceptions apply, the minimum NTA is the greater of $150,000, 0.5% of the average value of fund assets (capped at $5 million) or 10% of average revenue.
- Liquidity component: At least 50% of the NTA requirement must be held in cash or cash equivalents (with a $150,000 minimum), and 100% must be held in liquid assets.
Proposals
(a) Increasing the NTA requirement for responsible entities
ASIC is seeking feedback on three possible options for increasing the NTA requirement for new and existing responsible entities. ASIC states it may adopt one or a combination of these options.
Option | Impact on responsible entities |
|---|---|
Option 1 – Increase to reflect cumulative CPI growth since 2013 | This would (in approximate terms) raise the:
|
Option 2 – Increase the $150,000 minimum under the concessional requirement | This option would raise the $150,000 minimum under the concessional NTA requirement to either a higher fixed amount of up to $1 million, or by applying the requirement on a per-scheme basis so that responsible entities operating multiple schemes would hold $150,000 per scheme. |
Option 3 – Increase the $5 million cap under the concessional requirement | This option would increase the current $5 million cap on the average value of fund assets limb of the concessional NTA requirement. |
ASIC is also seeking feedback on whether the liquidity component remains appropriate and whether any changes should be made if the NTA thresholds are increased.
Transition period: If any proposals are adopted, ASIC will allow a six-month transition period for responsible entities time to comply.
(b) Concessional NTA requirement under review
ASIC is also seeking feedback on whether it remains appropriate for responsible entities to qualify for the concessional NTA requirement based on the use of a custodian or the type of fund assets. While the current approach recognises that holding assets with a qualified custodian may reduce certain risks, ASIC notes that the overarching purposes of the NTA requirement go beyond custody arrangements and include ensuring the responsible entity itself is an entity of substance.
(c) Amending the NTA requirement for other AFSL holders
ASIC is also seeking feedback on the following:
- IDPS operators and corporate directors of retail CCIVs: ASIC proposes to apply any changes to the NTA requirement for responsible entities equally to them, given these entities perform functionally similar roles as fund operators.
- Other AFSL holders currently subject to the NTA requirement: The consultation also seeks feedback on whether ASIC should review the NTA requirement for other AFSL holders, including licensed custodial or depository service providers, trustee companies, margin lending issuers and retail over-the-counter derivative issuers.
- AFSL holders not currently subject to the NTA requirement: ASIC is considering whether an NTA requirement should be introduced for AFSL holders not currently subject to them. This includes managed discretionary account providers, operators of unregistered managed investment schemes, issuers of non-cash payment facilities, financial advice licensees and crowd-sourced funding intermediaries. For issuers of non-cash payment facilities, ASIC notes that some may be exempt from these financial requirements where they are regulated by APRA. Others may need to comply with the surplus liquid funds requirement if they hold client money or property.
What’s next
Consultation closes 17 April 2026.
ASIC will release its position on the NTA requirement for responsible entities and its response to the consultation by 31 July 2026.
Treasury is also reviewing options to strengthen governance and financial requirements for responsible entities of registered schemes. ASIC indicates it will liaise with Treasury on the outcomes and timing of this review.
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