Increased financial requirements for responsible entities and platform operators now law

On 15 October 2026, ASIC formalised the increase to net tangible assets (NTA) for responsible entities and platform operators by amending ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647 (Principal Instrument), which notionally inserts section 912AA into the Corporations Act 2001 (Cth).

The changes apply to Australian financial services licensees authorised to operate a registered scheme, an IDPS or a retail CCIV, other than the excluded APRA-regulated bodies, market participants and clearing participants.

Commencement

The changes commence on 1 July 2027.

There are no transitional, savings or grandfathering provisions. From 1 July 2027, each affected licensee must hold at all times the increased NTA and cash amounts. There is no phase-in period and no relief for licensees part-way through a financial year.

The amended requirements

ASIC has increased each of the fixed dollar amounts in notional section 912AA. The amendments are as follows (all amounts before indexation):

• Minimum NTA where custody conditions are met: increased from $150,000 to $200,000.
• Cap on the 0.5% of fund assets limb: increased from $5 million to $7 million.
• Minimum NTA where custody conditions are not met: increased from $10 million to $14 million.
• NTA of an RE or retail CCIV holding eligible assets itself: increased from $500,000 to $700,000.
• NTA of a custodian holding eligible assets: increased from $500,000 to $700,000.
• Minimum cash or cash equivalents: increased from $150,000 to $200,000.

The percentage-based limbs are unchanged. These are 0.5% of the average value of fund assets, 10% of average revenue, 50% of required NTA in cash, and liquid assets of 100% of required NTA.

Indexation

Each of the six amounts above is indexed to the Consumer Price Index (CPI). Indexation occurs on 1 July in each year, beginning on 1 July 2027. The indexed amount is rounded to the nearest $1,000, with an amount ending in exactly $500 rounded up.

The new amounts are indexed on commencement

Indexation applies to each indexation year “starting on or after 1 July 2027”. For the year starting on that date, the “previously indexable amount” is the unindexed amount in the provision. The first indexation therefore occurs on 1 July 2027.

The practical effect is that the headline amounts of $200,000, $7 million, $14 million and $700,000 will never apply in their unindexed form. ASIC’s example in the instrument confirms this. It illustrates the $200,000 minimum becoming $206,000 on 1 July 2027 on an assumed indexation factor of 1.03. Licensees must plan their capital on the indexed figures, not the headline figures.

“Eligible assets” and custody arrangements

Because the $500,000 threshold has been increased, ASIC has renamed the defined term “Tier $500,000 class assets” as eligible assets. The substance of the definition is unchanged. It continues to cover:

• Real property intended to be held for the duration of the scheme or sub-fund (including mortgages, leases and licences);
• Physical assets that can reasonably be held by a custodian;
• Application and expense moneys held in a regulated trust account within the prescribed periods; and
• Special custody assets.

The increase from $500,000 to $700,000 (indexed) is of particular relevance to property and mortgage scheme operators. Where the responsible entity or retail CCIV holds eligible assets itself, it must hold at least the indexed $700,000 in NTA to access the lower NTA requirement.

Where eligible assets are held by a custodian or sub-custodian that is not an eligible custodian, the custodian must hold the indexed $700,000 in NTA. If it does not, and no other limb of notional subsection 912AA(5) (the custody conditions) is satisfied for that scheme, the $14 million requirement will apply, subject to indexation. Responsible entities relying on a related-party custodian must confirm that the custodian will meet the higher threshold.

Steps to take before 1 July 2027

Affected licensees should take the following steps before commencement:

1. Recalculate the NTA and cash requirements. Model the requirement using the new amounts plus a CPI allowance. Do not rely on the unindexed figures.
2. Review the basis on which subsection (5) is satisfied. For each scheme, IDPS and retail CCIV, identify which limb of subsection (5) is relied on. Where the licensee, retail CCIV or a custodian relies on the eligible assets limb, confirm it will hold the indexed $700,000 in NTA.
3. Address any capital shortfall. Shortfalls may be met by equity, by an eligible undertaking (such as a qualifying bank guarantee), or by restructuring custody arrangements. Each takes time to implement and some require ASIC’s approval.
4. Update cash flow projections. Projections for periods spanning 1 July 2027 must reflect the increased cash requirement from that date.
5. Update compliance and board reporting. Compliance plans, financial requirements monitoring procedures and board reporting must reflect the new thresholds and the annual indexation process.
6. Diarise annual indexation. The thresholds will now change every 1 July. Licensees need a process to calculate the new amounts once the March quarter CPI is published.

Concluding observations

With fewer than nine months until commencement, affected licensees must now confirm their capital position against the indexed amounts. Those relying on the eligible assets limb, or on a related-party custodian, face the greatest exposure.

If you require assistance complying with the new financial requirements, please contact Chris Mee at cmee@cnmlegal.com.au or call 07 3211 4010.

This article is produced as general information in summary for clients and should not be relied upon as a substitute for detailed legal advice or as a basis for formulating business or other decisions. CNM Legal asserts copyright over the contents of this article.