This article is from the Australian Property Journal archive
THE Australian Securities and Investments Commission has released a consultation paper proposing changes to improve disclosure for retail investors investing in unlisted mortgage schemes.
Consultation Paper 141 Mortgage schemes: Strengthening the disclosure benchmarks aims to build on the benchmark-based disclosure model for unlisted mortgage schemes, as outlined in ASIC’s Regulatory Guide 45 Mortgage schemes – improving disclosure for retail investors. The proposals in CP 141 reinforce ASIC’s focus on protecting retail investors through the promotion of better disclosure.
Since the release of RG 45, ASIC has worked with the responsible entities of unlisted mortgage schemes to help them understand the benchmarks and ASIC’s disclosure expectations. Throughout the implementation phase, ASIC has reviewed the effectiveness of the benchmarks and found they could be strengthened to respond to recent changes in the sector.
CP 141 includes a summary of ASIC’s findings on its review of the disclosure against the existing benchmarks in RG 45 and sets out proposals to improve the benchmarks to produce better and more focused disclosure by:
· simplifying the benchmarks to make it easier to determine whether the benchmark is met or not;
· separating additional disclosure requirements from the benchmark;
· clarifying how the RG 45 benchmarks apply to feeder funds; and
· providing additional guidance on compliance with the ‘if not, why not’ approach.
ASIC is seeking comments on the proposals in the consultation paper by 26 November 2010.
ASIC Commissioner Greg Medcraft said changes in market conditions have led to a reassessment of the risks and business practices in this sector.
“Our proposals are designed to improve the content and format of the benchmark disclosure that responsible entities should provide to retail investors,” he added.
Australian Property Journal
