ASIC has released Report 373 Response to submissions on CP 196 (REP 373), finalising our approach to relief for periodic statements and facilitating quotation of exchange traded funds (ETFs) on the AQUA market.
REP 397 highlights that issuers of interests in registered schemes were generally supportive of ASIC’s proposals.
ASIC has granted relief to issuers of AQUA quoted and listed managed investment schemes to help them overcome practical difficulties in preparing periodic statements for the scheme members.
ASIC has also granted relief to facilitate the quotation of ETFs on the AQUA market. This relief eliminates the need for issuers to apply for individual relief in most circumstances for each new ETF they quote on the AQUA market.
Class Order [CO 13/1200] Periodic statements relief for AQUA Quoted and Listed managed investment scheme issuer
Class Order [CO 13/1200] temporarily exempts issuers of interests in a listed and quoted scheme from the obligation under section 1017D of the Corporations Act 2001 (the Act). It also modifies the obligation permanently to:
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allow issuers to exclude transaction values and investment return information from the periodic statements where the issuer does not know the price of the transactions Issuers may still use either net asset value or last market price in preparation of the statement if it is not misleading to investors
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require issuers to provide a clear and prominent explanation of the price used to determine the dollar values on the statement
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require issuers to report on the statement whether the scheme has met its investment objective over the last one-year and five-year periods, and
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allow issuers to not include the termination value of investors' interest in the scheme.
Class Order [CO 13/721] Relief to facilitate quotation of exchange traded funds on the AQUA Market
ASIC issued [CO 13/721] to facilitate the quotation of ETFs on the AQUA market. In effect, this class order:
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allows the responsible entity to normally restrict withdrawal from the ETF to authorised participants only and to provide certain information to authorised participants before other members of the ETF. Effectively, this grants relief from equal treatment duty under paragraph 601FC(1)(d) of the Act
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allows the responsible entity to provide continuous disclosure to the market (on its website), rather than providing individual notifications to each retail investor. Effectively, this grants relief from ongoing obligations in relation to disclosure of material changes and significant events under section 1017B of the Act
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declares that the ETF's acquisition and withdrawal facility does not give the authorised participants a relevant interest in the securities that comprised the ETF. Effectively, this grants relief from takeover provisions under Chapter 6 and substantial holding notice obligation under Chapter 6C of the Act, and
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allows members of the ETF, in assessing their obligations to disclose their substantial holding under section 671B of the Corporations Act, to assume that the composition of the ETF's underlying securities is the same as the creation basket disclosed by the responsible entity at the beginning of the day.
ASIC Commissioner Greg Tanzer said, ‘The relief granted today will assist in the preparation of periodic statements in a way that will help investors make decisions on a more informed basis’.
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Background
In December 2012, ASIC released Consultation Paper 196 Periodic statements for quoted and listed managed investment products and relief for AQUA products (CP 196), seeking feedback on our proposals to grant the relief (refer12-320MR).
An ETF is an Exchange Traded Fund that is quoted on AQUA. AQUA is a market created by ASX to specifically manage the admission of ETF securities, managed fund products and structured products on the ASX market and to provide access for AQUA product issuers to clearing and settlement services provided by the ASX Group.
Listed managed investment schemes are managed funds listed or traded on any licensed financial market in Australia. The periodic statements relief applies to AQUA quoted and listed or traded managed funds on any licensed financial market.