Home -> Law Blog Directory -> International Law Blogs -> Australian Regulatory Compliance Review

International Law

: Australian Regulatory Compliance Review

Disclosure by unlisted mortgage and property schemes

ASIC has released consultation papers and draft regulatory guides aimed at improving disclosure to retail investors by unlisted mortgage schemes and unlisted property schemes.

Consultation Paper 99 Mortgage schemes ? improving disclosure for retail investors(including the draft regulatory guide)

Consultation Paper 100 Unlisted property schemes ? improving disclosure for retail investors (including the draft regulatory guide)

ASIC will be producing companion investor guides for both sectors to assist investors in understanding the enhanced disclosure and make better informed investment decisions.

ASIC encourages responsible entities to communicate the enhanced disclosure information to investors in the most effective way possible and using existing effective investor communication channels (e.g. by the scheme?s website and regular reports).

ASIC has also included draft guidance for advertising of these products and its expectations of compliance plans, compliance committees and compliance plan auditors.

Unlisted mortgage schemes
ASIC?s draft regulatory guide proposes a benchmark-based disclosure model for unlisted mortgage schemes. The eight benchmarks differ from the ones introduced for debentures to reflect the different risk profile of unlisted mortgage schemes and the different legal structures and rights associated with this type of investment.

ASIC is proposing that responsible entities for existing mortgage schemes report against benchmarks to existing investors by 31 October 2008. From this date, new fundraising documents for new and existing mortgage schemes need to comply with the ?if not, why not? benchmarks.

Unlisted property schemes
The new proposals centre on eight disclosure principles that are designed to give issuers guidance on key areas that need to be prominently disclosed to existing and potential retail investors.

Clear and prominent disclosure of information referred to in the disclosure principles will allow retail investors to compare the relative risk and return of unlisted property scheme investments.

ASIC does not currently propose to extend the ?if not, why not? approach to unlisted property schemes.

ASIC is proposing that responsible entities for existing unlisted retail property schemes provide updated disclosure to existing investors applying in the new disclosure principle by 31 October 2008. From this date, responsible entities of all unlisted retail property schemes will need to apply the disclosure principles to PDSs and ongoing disclosures.

Full post as published by Australian Regulatory Compliance Review on July 08, 2008 (boomark / email).