This article is from the Australian Property Journal archive
CORPORATE regulator, the Australian Securities and Investments Commission has released a consultation paper on proposed changes to scheme property arrangements.
The paper also seeks comments on a possible change to Class Order [CO 11/1140] Financial requirements for responsible entities (existing [CO 11/1140]) which would amend the definition of ‘special custody assets’.
ASIC Commissioner Greg Tanzer said responsible entities and custodians are important gatekeepers in the financial services industry and it is important that the guidelines reflect current law and practice.
“We propose to clarify and significantly strengthen the standards that asset holders must meet as important gatekeepers in the financial services industry,” he added.
The proposed requirements would also apply to investor directed portfolio service operators, managed discretionary account operators and sub-custodians.
Proposed content requirements in client agreements include that the custodian provides an indemnity to the responsible entity and has adequate arrangements to ensure it will report to ASIC if it suspects that its clients may have failed to report breaches to ASIC.
An omnibus account involves custodians holding financial assets in a way which does not separate scheme property for one managed investment scheme from the scheme property of other managed investment schemes.
ASIC will consider updating guidance in RG 133 based on the response to this consultation paper, as well as [CO 11/1140] and issuing a further class order to reflect certain other proposed modifications to the Corporations Act.
Property Review
