Chartered Accountants Australia and New Zealand welcomes the opportunity to provide this joint submission with other associations in response to Treasury’s consultation on Enhancing oversight and governance of managed investment schemes.

This consultation addresses critical weaknesses in the managed investment scheme framework. These weaknesses have been identified through multiple scheme failures and regulatory reviews over time. Experience shows that schemes can meet existing legal requirements while still exposing retail investors to significant harm. This harm often arises from weak governance, conflicted structures, or commercially unsustainable designs.

This submission builds on the Joint associations’ September 2023 submission to Treasury’s  Review of the regulatory framework for managed investment schemes and is intended to add to positions in that submission which were either:

• explicitly stated in that submission; or
• are clearly consistent with principles articulated in that submission.

Our submission supports Treasury’s focus on strengthening preventative regulatory settings. This includes enhanced ASIC gatekeeping and early‑intervention powers. It also includes improvements to compliance plan and audit frameworks, as well as stronger governance and conflict‑management arrangements. We consider these reforms essential to reducing reliance on downstream remediation and compensation mechanisms. They are also important for improving confidence in Australia’s managed funds sector.

We have framed our comments to balance investor protection with proportionality. This recognises the diversity of responsible entities and business models operating across the MIS sector. We would welcome ongoing engagement with Treasury as these reforms are further developed.

Experience shows that schemes can meet existing legal requirements while still exposing retail investors to significant harm