ASIC ups thresholds for NTA requirements

ASIC has introduced new rules that will require managed investment schemes (MISs) to increase minimum financial thresholds in their net tangible assets (NTAs).

From 1 July 2027, responsible entities of MISs, as well as investor-directed portfolio service (IDPS) operators and directors of retail corporate collective investment vehicles (CCIVs) will need to abide by higher thresholds when it comes to their NTAs.

The minimum NTA of $150,000, for example, will rise to $200,000, and the $500,000 NTA minimum will increase to $700,000.

The $5 million cap that applies to the average value of fund assets limb of the concessional NTA requirement would rise to $7 million, and the $10 million NTA minimum would rise to $14 million.

The newly published ASIC Corporations (Amendment) Instrument 2026/708 states amounts will be indexed on the first day of each indexation year starting on or after 1 July 2027, by multiplying the previously indexable amount for the provision by the indexation factor for the indexation year.

The rules state that licensees must hold NTAs at all times equal to the greater of $150,000 or, for amounts of up to $5 million being 0.5% of the average value of total assets, or 10% of the licensees average revenue. Otherwise, licensees must have either $10 million in NTAs or earn 10% of average revenue.

The changes factor in inflation, with the thresholds not having been updated since 2013.

From 2027, ASIC said it will publish the updated thresholds on its website each year after the relevant inflation data becomes available.

ASIC said it has also updated Regulatory Guide 166 AFS licensing: Financial requirements to reflect the upcoming changes.

The changes follow ASIC's launch of a consultation on the matter in March, receiving 18 submissions in response.

"We had a range of feedback from respondents on which option for increasing the NTA requirement was preferred," ASIC said.