Treasury eyes ASIC power boost after fund collapses

The Federal Treasury has launched a high-stakes consultation aimed at drastically expanding the Australian Securities and Investments Commission's oversight of the $2 trillion managed investment scheme sector.

Triggered by the high-profile collapses of the Shield Master Fund and First Guardian Master Fund—which left thousands of retail investors facing massive losses—the proposal seeks to move beyond traditional disclosure and "cookie-cutter" advice models.

The consultation paper outlines six pivotal reforms, including stricter compliance plan frameworks, a mandate for majority external directors on responsible entity boards, and a total prohibition on related-party transactions.

Treasury officials conceded that simply adding new obligations may be insufficient without "measures to enhance ASIC’s ability to detect and respond to poor governance," signaling a shift toward a more interventionist regulatory stance to protect retirement savings from high-risk, complex financial products.