ASIC’s review of managed fund compliance plans: a call to action for responsible entities

Authored by Meg Sandiford

The Australian Securities and Investments Commission (ASIC) has recently released the findings of its review into the compliance plans of responsible entities (REs) managing registered managed investment schemes. The review covered 50 REs who together oversee around $2 trillion in assets (representing 14.5% of all REs in the sector) and uncovered widespread deficiencies in how compliance obligations are being documented and managed.

Given the critical role that compliance plans play in safeguarding retail investors and ensuring regulatory integrity, the results demonstrate why this is a key area under regulatory focus. The purpose of compliance plans is to provide a clear and practical roadmap for ensuring schemes operate in accordance with the law. However, ASIC found that many of these plans were either outdated, lacked specificity, or failed to reflect key regulatory changes introduced in recent years.

Key Issues Identified

ASIC's review focused on how compliance plans address three major regulatory obligations: breach reporting under Regulatory Guide (RG) 78, product design and distribution obligations (DDO) under RG 274, and internal dispute resolution requirements under RG 271. Despite these being long-standing and well-defined obligations, many REs had not adequately integrated them into their compliance frameworks.

Plans often lacked meaningful detail, omitted critical risk areas, or failed to describe how key controls would be implemented and monitored. In some cases, there was no reference at all to recently introduced obligations. Such oversights can have significant implications for investor protection and may expose REs to enforcement action.

ASIC’s Next Steps

In response to these findings, ASIC has indicated it will step up its scrutiny of the managed investment sector. This includes closer monitoring of compliance plan audits, increased focus on breach reporting, and potential enforcement actions where compliance failures are identified.

ASIC is also urging all REs to revisit their compliance plans immediately, ensuring they are not merely procedural documents, but practical tools that reflect the day-to-day operations and risks of the schemes they govern. RG 132 remains ASIC’s central reference for what a good compliance plan should look like, and REs are expected to align closely with its guidance.

Responsible Entities Should Take a Proactive Approach

For REs, this review serves as a clear warning that REs should take a proactive approach by conducting a comprehensive review of their compliance frameworks, ensuring they incorporate all current regulatory requirements and reflect real-world operations and risks.

Compliance plans should detail the specific controls and processes in place to manage each regulatory obligation, describe how these are monitored and tested, and be regularly updated to reflect changes in law or business practices. The plan should also detail how staff training, risk assessment and audit processes are reviewed and updated to support compliance with regulatory changes.

Strong governance is critical to ensuring these plans are not only well-documented but actively monitored and refined and aligned with both regulatory changes and real-world operational risks. Independent oversight can strengthen accountability and ensure that the compliance plan remains robust and effective.

Final Thoughts

ASIC’s message is clear - compliance plans are not just regulatory documents - they are essential tools for managing risk and protecting investors. With increased regulatory scrutiny on the horizon, now is the time for all REs to review, strengthen, and future-proof their compliance frameworks.

How Owl Advisory Can Help

Owl Advisory specialises in developing, reviewing and updating compliance plans that meet ASIC’s expectations while enhancing operational efficiency and investor confidence.  We assist clients with implementing robust compliance controls, conducting gap analyses, supporting audit preparations, and providing training to compliance staff, employees and responsible managers.

We recognize the critical role of strong governance in overseeing these efforts. For REs that do not currently have a majority of external members on their board, Owl Advisory offers the opportunity to provide an external member to their compliance committees. By incorporating external expertise, REs gains an extra layer of independent oversight - helping strengthen the credibility of compliance efforts.

For more information, contact Himashi Cameron and Tim Bednall.

This publication is a joint publication from King & Wood Mallesons, and KWM Compliance Pty Ltd (ACN 672 547 027) trading as Owl Advisory by KWM.   KWM Compliance Pty Ltd is a company wholly owned by the King & Wood Mallesons Australian partnership.  KWM Compliance Pty Ltd provides non-legal compliance and governance risk advisory services for businesses.  KWM Compliance Pty Ltd is not an incorporated legal practice and does not provide legal services. Laws concerning the provision of legal services do not apply to KWM Compliance Pty Ltd.