ASIC today released final regulatory guides aimed at improving disclosure to retail investors by unlisted mortgage schemes and unlisted property schemes.

The release of this guidance is another important step forward in ASIC’s work in improving disclosure for unlisted property related retail investments.

ASIC Chairman Tony D’Aloisio said ‘We thank the many stakeholders who provided valuable submissions and comments on this work. We will now work with them to implement this enhanced disclosure for the benefit of retail investors and the sector.’

As with its work in the unlisted and unrated debentures, ASIC has produced companion investor guides for both sectors to assist investors in understanding the enhanced disclosure and make better informed investment decisions. These guides will be released later this month in time to be provided to investors with the enhanced disclosures.

Mortgage and property fund managers, industry and consumer groups, advisers, valuers, auditors, ratings agencies and financial planners together made over 50 submissions in response to ASIC’s consultation papers released on 7 July 2008.

In response to the submissions it received, ASIC has:

• modified certain aspects of the benchmarks and disclosure principles and advertising guidance in the regulatory guides;
• clarified the method of communication of the information to retail investors; and
• modified the implementation timetables.

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

ASIC also encourages responsible entities, compliance committees and compliance plan auditors to engage with this guidance in a timely manner.

Accompanying the regulatory guides are:

• A report outlining the submissions received together with reasons why ASIC may have followed or not followed certain suggestions; and
• A Regulation Impact Statement demonstrating that the benefits outweigh the cost of compliance in this exercise.

ASIC’s team will continue to work with unlisted property and mortgage fund responsible entities to assist them in practically implementing the enhanced disclosure in line with the modified implementation timetable.

Background

The $42 billion under management in the unlisted retail mortgage scheme sector and the $28 billion unlisted retail property scheme sector are part of the $1.6 trillion total unconsolidated funds under management.

Benchmarks for unlisted mortgage schemes

Disclosure principles for unlisted property schemes

End of release

Download:

• Regulatory Guide 45, Mortgage schemes-improving disclosure for retails investors
• Regulatory Guide 46, Unlisted property schemes-improving disclosure for retails investors
• Report 139, Report on submissions for CP 100 Unlisted property schemes—improving disclosure for retail investors
• Report 138, Report on submissions for CP 99 Mortgage schemes—improving disclosure for retail investors