ASIC has released new financial requirements for responsible entities (REs) of managed investment schemes in Class Order (CO 11/1140) and updated versions of Regulatory Guide 166 Licensing: Financial requirements (RG 166) and Pro Forma 209 Australian financial services licence conditions (PF 209).
REs must prepare 12-month cash-flow projections which must be approved at least quarterly by directors.
To meet the new net tangible asset (NTA) capital requirements, REs must hold the greater of:
- $150,000
- 0.5% of the average value of scheme property (capped at $5 million), or
- 10% of the average RE revenue (uncapped).
A liquidity requirement has also been introduced where an RE must hold at least 50% of its NTA requirement in cash or cash equivalents, and an amount equal to the NTA requirement in liquid assets.
