The Australian Securities & Investments Commission has foreshadowed tougher benchmarks and disclosure requirements for the managers of retail mortgage funds, after finding a majority of funds are not meeting current requirements.Funds may have to estimate their capacity to meet expenses over 12 months, rather than the three-month period required now. They may have to estimate cashflow needs over the same period.And they may have to give extensive details of any fund borrowings; whether they appoint independent valuers, and on what basis those valuers operate; whether any loans are for property development, and whether any loans are based on loan-to-valuation ratios of more than 70 per cent.Yesterday ASIC issued Consultation Paper 141, calling for comments by the end of November. It proposes to issue a new regulatory guide, replacing the current guide RG 45, early next year.RG 45, which was published in September 2008, sets out eight benchmarks for disclosure. These include fund liquidity and borrowing; the make-up of the loan portfolio; valuation and lending policies; distribution and withdrawal practices, and any related party transactions.RG 45 was published at a time when mortgage trusts were freezing or limiting redemptions, as a way of dealing with a liquidity crisis triggered by the government's decision to guarantee banks deposits, and the subsequent rush out of non-guaranteed investment products. A number of managers are still grappling with these issues.The benchmarks were established on an "if not, why not" basis, which meant that the fund did not have to comply with a benchmark but would have to explain why there was not compliance.When ASIC reviewed disclosure practices it found 77 out of 124 schemes were not providing disclosure on an "if not, why not" basis for all benchmarks. There was a low level of compliance with liquidity and portfolio diversification benchmarks and a lot of managers did not provide a clear statement as to whether a benchmark was met or not.In future, the disclosure rules will require a clear statement that the relevant benchmark is met or not.If this publication could offer its response to the consultation paper here, it would be to recommend ASIC make it a requirement that disclosures are more easily found on fund manager websites. Some managers go out of their way to make their RG 45 disclosures inaccessible.