In brief
ASIC has made ASIC Corporations (Amendment) Instrument 2026/708 ("Amending Instrument"), giving legal effect to the net tangible assets (NTA) uplift ASIC announced on 30 July 2026, as discussed in our 7 August 2026 client alert. The Amending Instrument confirms the previously reported increased base NTA thresholds for responsible entities of registered managed investment schemes, IDPS operators and corporate directors of retail CCIVs and mechanism for annual consumer price index (CPI) indexation. The changes commence on 1 July 2027. Importantly, the first indexation adjustment applies on that same day, so the initial thresholds will be the base amounts adjusted for CPI movement between the March 2025 and March 2026 quarters. ASIC has also made minor updates to RG 166.
Key takeaways
- The NTA uplift is now confirmed. The Amending Instrument updates ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647 ("Instrument 2023/647"). Consistent with ASIC's July 2026 announcement, the Amending Instrument raises:
- The AUD 150,000 NTA minimum to AUD200,000
- The AUD 150,000 minimum cash or cash equivalents requirement to AUD 200,000
- The AUD 500,000 NTA minimum to AUD 700,000
- The AUD 5 million cap under the average value of fund assets limb to AUD 7 million
- The AUD 10 million non-concessional minimum to AUD 14 million.
These are base amounts only. Each will be indexed on 1 July 2027, the day the changes commence, so the new thresholds that first apply will reflect CPI movement between the March 2025 and March 2026 quarters.
- Indexation mechanics are now settled. Each threshold will be indexed on 1 July each year, starting 1 July 2027, using the ratio of the March quarter CPI numbers for the two preceding years, and rounded to the nearest AUD 1,000 (rounding up if the amount ends in AUD 500 exactly).
- ASIC will publish the thresholds annually. From 2027, ASIC will publish the updated thresholds on its website each year once the relevant inflation data becomes available. ASIC has also made minor updates to RG 166 to reflect the changes.
- Preparations can now be finalised. With the law now settled, affected entities should confirm whether additional capital, liquidity support, board approvals, financial forecasts, compliance monitoring or updates to internal policies will be needed before 1 July 2027 (including allowing for the first indexation on that date), and should budget for annual increases thereafter.
In more detail
Background
In March 2026, ASIC released CP 388 to consult on whether NTA requirements for responsible entities and related fund operators should be increased. On 30 July 2026, ASIC announced that it would adopt the CPI-linked option (Option 1 from CP 388) and would not proceed with more substantive reforms. ASIC has now made the Amending Instrument to give legal effect to that policy. The Amending Instrument amends section 5 of Instrument 2023/647.
What will change
The Amending Instrument substitutes the following amounts (each expressed to be "as indexed"):
- The AUD 150,000 concessional NTA minimum will increase to AUD 200,000.
- The AUD 150,000 minimum cash or cash equivalents requirement will increase to AUD 200,000.
- The AUD 500,000 NTA minimum will increase to AUD 700,000.
- The AUD 5 million cap under the average value of fund assets limb will increase to AUD 7 million.
- The AUD 10 million non-concessional NTA minimum will increase to AUD 14 million.
As part of the change to the AUD 500,000 threshold, the defined term "Tier AUD 500,000 class assets" is renamed "eligible assets". Entities that use that term in compliance plans, policies or reporting should update their documentation accordingly.
How indexation will work
In summary:
- Each threshold is indexed on 1 July of each year (an indexation year), starting on 1 July 2027.
- The indexation factor is the All Groups CPI number (weighted average of the eight capital cities) for the March quarter in the preceding indexation year, divided by the CPI number for the March quarter in the second preceding indexation year, calculated to three decimal places.
- For 1 July 2027, the factor is applied to the base amounts in the Amending Instrument. In later years, it is applied to the amount that applied immediately before the start of that year, so increases compound.
- Indexed amounts are rounded to the nearest AUD 1,000, with amounts ending in exactly AUD 500 rounded up.
- Later revisions of a published CPI number are disregarded and do not amend the thresholds.
- If the CPI reference base changes, only CPI numbers published on the new base are used after the change is made.
For example, the factor for the indexation year starting on 1 July 2027 is the March 2026 quarter CPI number divided by the March 2025 quarter CPI number. On the Amending Instrument's illustrative factor of 1.03, the AUD 200,000 minimum would become AUD 206,000 on 1 July 2027, and that AUD 206,000 would then be indexed again on 1 July 2028. Because the calculation uses March quarter data from earlier years, the thresholds for each year can be calculated well before 1 July. From 2027, ASIC will also publish the updated thresholds on its website each year once the relevant inflation data becomes available.
What will not change
ASIC has decided not to proceed with the more substantial alternatives raised in CP 388. It will not impose a higher concessional minimum of up to AUD 1 million, will not apply the minimum on a per-scheme basis, and will not otherwise restructure the concessional NTA requirement at this stage. ASIC previously acknowledged stakeholder concerns that those changes could increase barriers to entry, compliance costs and impacts on smaller operators.
ASIC also confirmed in its July 2026 response that the current review does not extend to other AFS licensees, although feedback on custodial and depository service providers and wholesale structures may inform future work.
Updated RG 166
ASIC has made minor updates to RG 166 to reflect the upcoming changes. The underlying financial-requirements methodology is unchanged, other than the implementation of the new thresholds. The new amendments principally insert comments noting the increased NTA dollar thresholds commencing 1 July 2027, and add minor clarifications such as that the average value of fund assets test does not capture schemes no longer operated by the responsible entity.
Next steps
With the Amending Instrument made, responsible entities, IDPS operators and corporate directors of retail CCIVs should prepare to comply with the relevant updated NTA threshold (including allowing for the first indexation upon commencement). They should then finalise capital forecasts, liquidity arrangements, financial covenants, board reporting and compliance monitoring processes, and build annual indexation into ongoing capital planning.