The Australian Securities and Investments Commission (ASIC) has issued a class order to provide relief for retail clients applying for interests in managed investment schemes through mFund Settlement Service.
Under class order 13/1621, responsible entities (REs) of managed investment schemes do not have to issue interests to an application form that was included in or accompanied a product disclosure statement (PDS).
REs will also be allowed to issue in response to electronic messages through mFund, showing the investor has been given the latest version of the PDS.
The Australian Securities Exchange wanted relief from section 1016A, which asked a retail investor to apply using an application form that was included in or accompanied a PDS, or an application form copied by the applicant from that form.
ASX argued this prevented mFund from operating efficiently.
"This relief assists in making the industry more efficient without compromising investors receiving a product disclosure statement before investing," ASIC Commissioner Greg Tanzer said.
"This will make the process of acquiring and disposing of interests in managed investment schemes more efficient and lower operational costs for the investment management industry as a whole."
The electronic message sender must be an Australian financial services (AFS) licensee or an authorised representative. They must not send the electronic message unless the investor has received the latest PDS for the scheme.
mFund is jointly run by the Australian Securities Exchange (ASX) and ASX Settlement where holdings are recorded through CHESS.
Assistant Treasurer Arthur Sinodinos declared mFund an exempt market to make it easier to operate, meaning ASX Settlement will not have to hold an Australian Market Licence.
A revised set of ASX Operating and ASX Settlement Operating Rules has been made to ensure disclosure is received by investors.
It also specifies licensees' responsibilities to provide an up-to-date PDS and REs to check receipt with retail investors.
ASIC has also exempted ASX and ASX Settlement from needing an AFS licence for operating mFund.
