ASIC identifies gaps in compliance plans across managed investment schemes

ASIC has identified deficiencies in compliance plans across the managed investment industry, releasing its findings following a review of 50 responsible entities (REs).

The review of nearly 1,500 funds with a combined value approaching $1 trillion highlighted areas where compliance plans could be enhanced to better address core regulatory duties. In particular, many plans lacked sufficient detail or did not fully incorporate obligations under the Design and Distribution Obligations (DDO), Internal Dispute Resolution (IDR), and Reportable Situations (RS) frameworks. In some instances, DDO wasn’t mentioned at all – indicating that these documents may not have been properly updated since the regime’s introduction in 2021.

ASIC’s findings underscore the importance of maintaining compliance plans that are current, comprehensive, and aligned with evolving regulatory expectations.

Why does this matter?

Compliance plans are not just a regulatory formality – they are a critical component of the governance framework designed to protect retail investors. ASIC’s findings revealed that many REs may not be meeting their obligations under the Corporations Act 2001, raising concerns about governance and risk management.

Key findings from ASIC’s review:

• Limited coverage of obligations: Many plans lacked sufficient detail on how REs comply with DDO, IDR, and RS requirements.
• Outdated documentation: Some compliance plans had not been updated since 2021, despite significant regulatory developments since then.
• Governance concerns: The scale of deficiencies suggests broader issues with oversight and accountability within REs.

What REs should do now

ASIC has contacted several REs and is investigating others for potential breaches. All REs are urged to:

• Conduct a comprehensive review of their compliance plans.
• Benchmark against better practices identified in ASIC’s report.
• Ensure plans are tailored, up-to-date, and embedded into operational processes.

How we can help

This review is a timely reminder that compliance plans should be living documents – actively maintained, regularly reviewed, and aligned with evolving regulatory expectations. For REs, this is not just about avoiding enforcement action; it’s about demonstrating a commitment to investor protection and sound governance.

At Grant Thornton, we work with fund managers to strengthen compliance frameworks and embed regulatory obligations into day-to-day operations. If you’d like to discuss how these findings may impact your business, please get in touch.

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