International Law

ASIC report on disclosure by capital protected products

By David Jacobson

ASIC has released a report Review of disclosure for capital protected products and retail structured or derivative products (Report 201) outlining its key findings from a review of selected Product Disclosure Statements (PDSs) for capital protected products and other structured or derivative products marketed to retail investors.

ASIC recommends issuers:

• clearly explain counterparty risk, and include supporting financial information, to ensure retail investors can assess the issuer’s financial ability to meet its counterparty obligations of capital protected products,
• ensure disclosure is sufficient so that investors can assess the likelihood of early termination or any other significant limitations of these products
• provide better disclosure of break costs that may apply where an investor seeks to terminate or redeem a product before its maturity date.

Full post as published by Australian Regulatory Compliance Review on July 25, 2010 (boomark / email).