“Numerous attempts by industry participants and bodies have been made over the years to develop policies for minimum levels of portfolio disclosure. Most of these efforts have been in vain,” Morningstar said.

“One area of possible improvement has been a requirement by superannuation funds to disclose portfolio holdings. Frustratingly, this initiative continues to be delayed at least until 2021 while regulations are finalised.”

The new standards were delayed until end-2021 last week, with ASIC flagging the possibility of shortened relief if the government developed the regulations required sooner. However, if the new standards were to go ahead, it wouldn’t get Australia anywhere close to global best practice due to the fact it only requires semi-annual disclosure and doesn’t cover funds themselves.

“Unless the mutual fund is a related party to an Australian registrable superannuation entity and managing superannuation fund assets, there will be no portfolio disclosure obligations. The regulatory impost is unfortunately on the superannuation trustee and not the responsible entities of managed investment schemes (mutual funds) in Australia,” Morningstar said.

Australia also remains a “Wild West” for ESG, with companies free to “issue and define” products as they see fit in the absence of strong regulation. The regulators have no plans to improve ESG disclosure at this time. 

“For a country that aspires to be considered a global financial centre, having weak regulation that endorses substandard portfolio disclosures should be a concern for all industry participants and is not in the best interests of retail investors,” Morningstar said.