The SMSF Association has thrown its support behind the Federal Government’s decision to initiate a Treasury review of the managed investment schemes (MIS) regulatory framework.
The review, announced yesterday by the Assistant Treasurer and Minister for Financial Services, Stephen Jones, will specifically examine whether the regulatory framework is fit-for-purpose, identify potential gaps, and consider what enhancements can be made to reduce undue financial risk for investors.
SMSF Association CEO Peter Burgess says: “We welcome this announcement and look forward to making a submission. Over the years self-managed super fund (SMSF) members have lost millions of dollars via failed MIS, so any review and subsequent recommendations that strengthen investor protections must be a positive not only for SMSFs but the entire superannuation sector.
“Certainly, we believe it’s appropriate for the review to consider reform options surrounding wholesale investor thresholds and whether certain MIS should be permitted to be marketed to retail clients.
“Other issues that need addressing include examination of the classes and types of MIS, and, where applicable, consider changes to the regulation of certain classes of MIS, and the regulatory framework, including the approval of product disclosure statements.
“The gaps between State and Commonwealth regulations, including those identified in the Sterling Income Trust Inquiry – its recommendations were handed down in February 2022– also need to go under the microscope.”
Burgess adds we encourage the Government to reconsider the review’s terms of reference, and allow the review to consider whether MIS should be included in a compensation scheme of last resort for retail investors.
Treasury will release a public consultation paper by mid-2023 and consult with industry before reporting its findings to the Government by early 2024.