AUSTRALIA Law and Practice Contributed by: Andrew Stone, Dhanushka Jayawardena, Andrew Choi and Chris Kinsella, Holding Redlich
If a fund sponsor wishes to establish an Australian entity as manager or as trustee of an unregistered managed investment scheme, then an Australian proprietary limited company would typically be estab - lished. At least one director of such a company must live in Australia. Responsible entities of registered managed investment schemes must be Australian public companies. At least two directors of an Aus - tralian public company must normally live in Australia. All directors must apply for and obtain a director ID before their appointment. Funds proposing to register in Australia as a VCLP or an ESVCLP must ensure that all general partners of the fund are residents of Australia or of a foreign country with which Australia has a double tax agree - ment in force. If a fund wishes to obtain the benefits of the Austral - ian MIT regime, an entity holding an AFSL must be engaged. 2.9 Rules Concerning Service Providers In general, there are no restrictions on the choice or location of service providers. However, a party wishing to engage with the trustee of an unregistered managed investment scheme or with a general partner of a VCLP or an ESVCLP or with the responsible entity of a registered managed investment scheme should ensure that the trust deed or partner - ship agreement (as applicable) contains appropriate drafting to permit such an engagement. Importantly, Australian law deems that – for the pur - poses of determining whether there is a liability to members of a registered managed investment scheme – the responsible entity of the scheme is taken to have done (or not done) anything that any service provider appointed by the responsible entity has done. In relation to custodial services, Australian-domiciled custodians generally require an AFSL, subject to lim - ited exceptions. Entities subject to Australian AML laws must ensure compliance with those laws, regardless of whether
any third-party providers are engaged to assist with KYC or other obligations. 2.10 Anticipated Changes for Funds Private Capital Market Governance ASIC has indicated that in November 2025, it will issue six guidance documents relevant to alternative funds: • ASIC report on Australia’s evolving capital markets; • ASIC report on private credit surveillance; • expert report on the future state of Australia’s capi - tal markets; • expert report on international comparison of data reporting and transparency in private markets; • guiding principles for the private credit industry; and • catalogue of regulatory guidance for the funds management sector. ASIC has also indicated that these updates may include requirements relating to: • disclosure of fund leverage and liquidity risk man - agement; • valuations, including obtaining and reporting independent loan valuations, with information on frequency, methodology and beneficiary; • terminology used by the fund sponsor in relation to the features of the fund; • remuneration and fees to make readily observable the true cost of managing the fund; • related-party transactions; and • conflicts management, including both conflicts of interest and conflicts of duty (including duty-duty conflicts of any counterparty to an AFSL holder). It is anticipated that the updates will be relevant to the compliance, governance and some aspects of the operating processes of alternative fund managers. In response, alternative fund managers are preparing to update their processes accordingly. Digital Assets In September 2025, the Australian government released draft legislation in relation to digital assets. The proposed changes introduce two new finan - cial products within the Corporations Act – namely,
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