Funds Update - 30 October 2026

In this Funds Update for 30 October 2026:

1. Increased minimum NTA requirements for responsible entities
2. ASIC makes PDS stop order against mortgage fund
3. ASIC's annual report released
4. Treasury proposes to increase financial thresholds for small proprietary companies

1. Increased minimum NTA requirements for responsible entities

Following ASIC’s consultation under Consultation Paper 388, which we reported on 20 March 2026, on increasing net tangible assets (NTA) requirements, ASIC has issued an amending instrument to increase minimum NTA thresholds from 1 July 2027, and to introduce annual indexation of the thresholds from 1 July 2027. 

These changes will apply to responsible entities of registered managed investment schemes, IDPS operators and corporate directors of retail corporate collective investment vehicles. The key minimum NTA threshold changes are:

These changes have been implemented by the ASIC Corporations (Amendment) Instrument 2026/708, which amends the ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647. ASIC has added notes into the September 2023 version of the Regulatory Guide 166, AFS licensing: Financial requirements, to address these NTA changes. 

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2. ASIC makes PDS stop order against mortgage fund

On 26 October 2026, ASIC made an interim stop order on the product disclosure statement (PDS) issued in relation to interests in a registered managed investment scheme which invested mainly in loans secured by mortgages over Australian real property.  ASIC was concerned that the PDS: 

• failed to disclose information about related party transactions;
• failed to adequately disclose information about the fees and costs associated with an investment in the fund;
• contained insufficient information about risks and risk disclosure which was not clear, concise and effective; and
• failed to adequately and prominently disclose details about withdrawals.

The interim stop order arose from ASIC’s continuing surveillance of private credit funds. 

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3. ASIC's annual report released

On 19 October 2026, ASIC announced the publication of its 2025-26 Annual Report (Report). 

The Report highlights ASIC’s continuing enforcement actions including:

• ASIC has completed 1,012 surveillances, commenced 260 formal investigations and $830 million in civil penalties imposed by the courts during 2025/26;
• ASIC continued focus into private capital markets and private credit, including intervening where product documentation does not adequately disclose risks to investors; and
• ASIC has taken enforcement action in response to the collapse of the Shield Master Fund and First Guardian Master Fund, commencing 15 Federal Court proceedings against 30 defendants commenced in June 2026.

In relation to the managed funds and private credit sector, the Report outlines that ASIC:

• conducted targeted surveillance of eight wholesale private credit funds and 20 registered retail private credit funds between November 2024 and October 2025;
• identified material gaps and inconsistent practices across the sector and reported that surveillance was ongoing, with a further 25 retail and wholesale funds under review;
• intends to undertake further targeted surveillance of fund managers focusing on distribution, fees, margins and conflicts of interest; and
• set out plans to refresh funds management regulatory guidance and work with government and industry on managed funds and private credit standards.

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4. Treasury proposes to increase financial thresholds for small proprietary companies

On 19 October 2026, Treasury released for consultation draft amendments to the Corporations Regulations 2001 (Cth) that would increase the financial thresholds for determining whether a proprietary company is “small proprietary company” under the Corporations Act 2001 (Cth).

The Government is proposing the increase the monetary thresholds for determining whether a company is a “small proprietary company” to:

• up to $100 million consolidated revenue (from up to $50 million); and
• up to $50 million consolidated gross assets (from up to $25 million).

The purpose of these changes is to reduce the number of proprietary companies being classified as “large proprietary companies” and so required to prepare annual audited financial, directors, and sustainability reports. 

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