Mulino targets retail investor protections, high-risk MISs: SIAA

Assistant treasurer Daniel Mulino will target the flow of retail investor money into high-risk managed investment schemes (MIS), the Stockbrokers and Investment Advisers Association (SIAA) Conference heard this morning, flagging how regulators will use their new funding bonanza to prevent another Shield and First Guardian Master Fund disaster.

Providing more details about how the government is approaching new regulation around MISs, which received a nearly $18 million funding boost on Budget night, Mulino said introducing "sensible guardrails" would not impede the contribution of MISs to the capital markets and economy.

The government's dedicated $10.3 million to MIS regulation, split across four years, will increase ASIC's data oversight capability to the structures.

The funding boosts comes off the back of the large-scale Shield and First Guardian Master Fund collapses - MIS structures that housed and put at risk about $1 billion of investor money.

An additional $7.6 million was committed to ASIC, Treasury and the Auditing and Assurance Standards Board to strengthen governance requirements for MISs, with $1.4 million per year to be ongoing.

"This is to help ensure that regulators have the data they need to better identify concerning these structures," he said.

"This, for example, puts ASIC in a better position to identify high-risk MISs [and] understand the risk profile of MISs, if it could firstly then have a better sense of looking into flows of retail investors into those MISs, it would allow a much more targeted approach by assets, so that it could examine flows of investors much more quickly than is currently possible, so that they can prevent large collapses happening before there are thousands of investors affected."

Mulino noted regulators potentially closely looking at flows into certain types of MISs where "certain red flags arise."

"It also gives the possibility of regulation of retail investors in that context in a way that might be differentiated from very low-risk MISs," he said.

Another review of MISs that recently concluded sought to improve ASIC's oversight of the structures.

Treasury proposed a new MIS regulatory framework will have stricter compliance plan requirements, such as a detailed description of the nature of the MIS and its investment strategy, and information outlining how significant risks will be identified, monitored and managed.

At the conference, Mulino said: "Managed investment schemes, clearly play a critical role in our system, as a collective investment vehicle, they play a critical role in capital markets. They can, in some contexts, though, be problematic for retail investors, either where a MIS is not particularly transparent or clear for a retail investor in the asset composition, or where it doesn't have sufficient diversification."

The assistant treasurer reiterated he is ultimately looking at pressing reforms in the financial services sector, including the Compensation Scheme of Last Resort (CSLR), Delivering Better Financial Outcomes (DBFO) and financial adviser education pathways, as a broad piece of work.

"What happened soon after I came into this role is that we saw the Shield and First Guardian collapses, which raised issues around consumer protection in that context, but also then raised related issues around the sustainability of the CSLR, the burden of the CSLR on different sectors, and so ultimately a lot of these issues required attention simultaneously, and what I and the government and the department have tried to do is to examine those issues in a holistic way," he said.

"It's critical that we think about whether regulation is fit for purpose very much with the mind to not over regulating, and that goes back to the point that I touched on earlier, that we are very focused on the regulatory design being appropriate and fit for purpose."

Financial Standard is the official media partner of the 2026 SIAA Conference.