The Australian Securities and Investments Commission (ASIC) has moved to improve the protections for retail investors involved in unlisted property schemes by lifting the disclosure requirements on such products.
The proposed new arrangements will see companies promoting such investments required to comply with benchmarks around gearing, related party transaction, valuations and distribution.
Commenting on the move, ASIC chairman Greg Medcraft said the proposals were aimed at improving the level of comparability and consistency of disclosure provided to retail investors.
“Our experience indicates that investors need better quality and relevant disclosure presented in a way best suited to investor understanding,” he said.
“Product Disclosure Statements must be worded and presented in a clear, concise and effective manner to help retail investors assess an offer and make informed investment decisions,” the ASIC chairman said.
He said that ASIC’s review of the sector had revealed that a number of key disclosures had not been adequately addressed including the risks associated with the borrowing maturity profile and the extent of hedging, detail about property development activities, the basis of valuations and withdrawal rights and the risks associated with withdrawal arrangements.
