The Australian Securities and Investments Commission has finalized higher net tangible asset thresholds for responsible entities, investor-directed portfolio service operators, and corporate directors of retail collective investment vehicles, legalizing changes first floated in March 2026, Baker McKenzie reported.
The regulator issued the Amending Instrument 2026/708 to enact these capital rules. The policy updates Instrument 2023/647 after an initial consultation period launched under consultation paper CP 388 in March 2026. Regulators chose a Consumer Price Index-linked option rather than pursuing more aggressive restructuring proposals that smaller market operators warned would create severe entry barriers.
Higher Thresholds and Asset Definitions
The updated rules push the baseline concessional net tangible asset minimum from AUD 150,000 to AUD 200,000. The mandatory cash or cash equivalents requirement matches that figure, also rising to AUD 200,000. Meanwhile, the general net tangible asset minimum jumps from AUD 500,000 to AUD 700,000.
Alongside these direct asset increases, the fund asset cap moves from AUD 5 million to AUD 7 million under the average value of fund assets limb. The non-concessional minimum increases from AUD 10 million to AUD 14 million. In addition to these numerical shifts, regulatory guidelines rename Tier AUD 500,000 class assets to “eligible assets,” requiring operators to update internal compliance manuals.
Consumer Price Index Indexation Schedule
These new dollar figures serve as baseline amounts subject to immediate indexation when the rules commence on July 1, 2027. The initial adjustment will reflect inflation movement between the March 2025 and March 2026 quarters. Subsequent adjustments occur on July 1 each year using the ratio of March quarter figures from the two preceding years.
The calculations require rounding to the nearest AUD 1,000, with amounts ending in exactly AUD 500 rounding upward. The regulator plans to publish updated thresholds annually on its official website once inflation data clears. Minor changes to RG 166 accompany the framework updates, clarifying that the average asset test excludes schemes no longer managed by the responsible entity.
Compliance Preparation and Capital Planning
Affected firms face a strict timeline to review capital forecasts, liquidity arrangements, and internal policies ahead of the July 2027 commencement date. Operators must factor in both the base adjustments and the compounding effect of the first annual indexation cycle hitting simultaneously. While current requirements exclude other Australian Financial Services licensees, regulatory feedback on custodial services may drive future rule-making.
Frequently Asked Questions
When do the new net tangible asset thresholds officially take effect?
The updated requirements commence on July 1, 2027, according to the regulatory filing.
How much will the base concessional minimum increase?
The concessional net tangible asset minimum rises from AUD 150,000 to AUD 200,000.
Will indexation apply immediately on the start date?
Yes. The first indexation adjustment applies on July 1, 2027, factoring in Consumer Price Index movements between the March 2025 and March 2026 quarters.
What happened to the more substantive restructuring options proposed earlier?
Regulators discarded proposals to impose a concessional minimum of up to AUD 1 million or apply rules on a per-scheme basis after stakeholders raised cost and barrier-to-entry concerns.