Mortgage schemes gain brief reprieve
Operators of mortgage investment schemes have been given more time to become licensed through the Australian Securities and Investments Commission (ASIC).
Operators of mortgage investment schemes have been given more time to become licensed through the Australian Securities and Investments Commission (ASIC).
A spokesperson at ASIC has told Money Management the November 1 deadline had been extended to December 17 because “some people were having trouble un-derstanding what they were required to do to gain a license”.
Mortgage investment schemes, mainly promoted by solicitors, have been dogged by bad publicity in recent months, following the collapse of several schemes that left investors out of pocket.
Earlier this year, the ASIC released a draft policy statement outlining a spate of new minimum requirements for operators of mortgage investment schemes. In July, it outlined its final policy stating that these schemes were to come under the umbrella Managed Investments Act (MIA).
At the time of the policy release, ASIC chairman Alan Cameron was quoted as saying the growth in investment funds and the “failure of schemes worth millions of dollars means that ASIC must look to the protection of investors in what has be-come a major investment industry”.
Under the new regulations, operators of mortgage investment schemes will come under the direct supervision of ASIC (previously, operators came under the super-vision of industry bodies) and all operators will therefore have to be licensed. In-vestment offers will require a prospectus to be issued to potential investors and the operators would have to become a member of an external complaints resolution scheme. ASIC will also implement tougher compliance and custody requirements on operators, in accordance with the Corporations Law.
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