If SMSF assets were held purely in the ASX Top 50, 47 per cent would be in financials, 20 per cent would be in resources and 9 per cent in consumer staples, Mr Arambewela said.

“The important point is it’s very concentrated,” he added.

“In the context of the [AMFS], if we can allow access to good quality fund managers through our service, that allows SMSF trustees in this service to diversify a lot more and they can do that as a central source through ASX.”

Stressing that the AQUA II working title had been abandoned, Mr Arambewela said there are a number of other misconceptions about the project.

The service is not about providing a secondary market for trading managed funds, he said, and price discovery still occurs at the manager level.

“What we’re really doing is facilitating the flow of information around applications and redemptions in an electronic way,” he said.

“It’s allowing you then to hold fractional units [of managed funds] alongside your equities and shares. Importantly, at an investor level you’ll now be able to hold these managed funds with ETFs [and] shares.”

The technology upgrades have been completed, and with regulatory approval underway, the ASX expects to launch the service in the first quarter of 2014, he added.

“From an ASX perspective, the technology’s been completed - that’s all the changes we had to make to our CHESS system; the testing environment’s been established - it’s being used at the moment by some participants; and we’ve got 65-plus foundation members signed up.”

Those members comprise responsible entities, fund managers, brokers and unit registries, he added.