AUSTRALIA Trends and Developments Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
The Australian investment fund landscape has seen a number of trends and developments over the past 12 months from both a commercial and regulatory perspective. Commercial Trends and Developments The Australian market is increasingly shifting away from intermediated retail investing, with fund managers seeking more direct ways to reach retail investors. There is notable growth in the exchange-traded fund (ETF) market as tradi - tional fund managers explore exchange-traded structures, particularly for active or bespoke strategies. Retail investors seek access to a more diverse range of investment offerings at competitive price points. There has been increasing interest in the dual access structure for ETFs, with fund managers wanting to take advantage of the benefits and flexibility provided by the structure. This struc - ture allows a financial product issuer to offer the product as an ETF (by quoting units in the fund on an exchange like the ASX) while also allow - ing applications and redemptions off-market. Dual access mechanics and infrastructure are increasingly being considered and built into new products, even where the structure is not imme - diately utilised, to allow fund managers the flex - ibility to offer this access when demand arises. Regulatory Trends and Developments ASIC’s focus on enforcement In its 2024-25 Corporate Plan, the Austral - ian Securities and Investments Commission (ASIC) outlines its two main objectives for tak - ing enforcement action: to hold individuals and companies accountable and to deter future mis - conduct. This approach involves focusing on types of misconduct that impact a large number of consumers, as well as pursuing substantial penalties and sentences through the courts.
Over the previous year, ASIC has bolstered its enforcement efforts, increasing new investiga - tions by 25% and civil proceedings by 23%. Each year, ASIC identifies its key enforcement priorities. On 14 November 2024, Deputy Chair Sarah Court announced that ASIC’s enforce - ment in 2025 would concentrate on 12 key areas – with consumer protection being at the forefront, especially given the heightened cost of living challenges. Within the realm of financial markets, Ms Court declared ASIC’s unwavering commitment to maintaining the integrity of Aus - tralia’s financial markets, supported by a newly established team dedicated to insider trading. Additionally – and of particular relevance to Australian funds market participants – ASIC has expressed its commitment to addressing cyber- security, greenwashing and misleading conduct involving ESG claims throughout 2025. Existing participants (as well as new entrants) in the Australian funds market must adopt a customer-centric mindset. Implementing robust legal compliance processes to monitor their financial services activities is essential. Addi - tionally, maintaining appropriate governance, oversight, and systems for these compliance processes is crucial. Design and distribution obligations ASIC has demonstrated that it continues to actively monitor DDO (The Design and Distribu - tion Obligations) compliance and stands ready to act where necessary to prevent consumer harm. Since the obligations commenced, ASIC has instigated civil penalty proceedings against five providers and has issued 88 interim stop orders and one final stop order under the DDO regime. Enforcement action targeting poor distribution of financial products was an ASIC enforcement priority in 2024, and the regulator
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