ASIC ups disclosure for unlisted property schemes
Unlisted property schemes will be required to adhere to six new disclosure benchmarks from 1 November 2012.
Australian Securities and Investments Commission (ASIC) Regulatory Guide 46 has been updated to include benchmarks relating to the unlisted property scheme's gearing policy, interest cover policy, interest capitalisation, valuation policy, related party transactions and distribution practices.
The scheme must disclose whether each benchmark is 'met' or 'not met', on an 'if not, why not' basis, according to RG 46.
The regulatory guide expresses ASIC's concern that unlisted property schemes often appeal to retail investors "who may believe that the investment offers capital stability and consistent ongoing returns that are not likely to vary significantly".
ASIC commissioner Greg Tanzer warned that while "many Australians like to invest in real estate", unlisted property schemes "carry risks as well as opportunities".
"It's necessary to ensure investors have the information they need to make informed investment decisions, as inadequate disclosure can contribute to investors not understanding the risks," Tanzer said.
Responsible entities must also ensure that the advertising of unlisted property schemes is consistent with the disclosure of the new benchmarks in the Product Disclosure Statement (PDS).
Additionally, any investment rating used in the advertising must be issued by a research house with an Australian financial services licence, and must not mislead consumers, according to RG 46.
Responsible entities must disclose the benchmarks and the new principles to investors by 1 November 2012, and new PDSs after 1 November 2012 must include "prominent and clear disclosure" of the benchmarks.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
