Charitable investment fundraisers regulation tightened
The Australian Securities and Investments Commission (ASIC) has tightened its regulatory framework for charitable investment fundraisers, so the public are better protected.
ASIC said from 1 January 2017 charitable investment fundraisers would no longer be allowed to issue at-call or investment terms less than 31 days to retail investors. Such organisations would also be required to hold an Australian financial services licence (AFSL) from ASIC. Additional restrictions would apply, so investment was not for transaction purposes, ASIC said.
ASIC handed down the tighter framework following its review of charities that raised investment funds. It found that they had difficulties with liquidity management in their fundraising and lacked effective disclosure.
ASIC also reviewed the exemptions available to charities from managed investments, debentures, fundraising and licencing provisions.
ASIC also applied disclosure, lodgement breach reporting and financial reporting requirements.
The corporate watchdog noted that some charitable fundraisers were religious charitable development funds which relied on the Australian Prudential Regulation Authority's (APRA's) exemptions from the Banking Act.
ASIC Commissioner, Greg Tanzer, said: "We are satisfied that our policy strikes the right balance between exempting charitable investment fundraising from applicable legal provision where investors are motivated to support the charitable purposes while maintaining appropriate protections for investors".
The changes were made in consultation with APRA.
Recommended for you
Bell Financial Group has announced a 44 per cent decline in half-year net profit after tax but record funds under advice as it transitions into a diverse wealth management business.
Having predicted three ETF trends for Australia at the start of this year, State Street has shared how these are tracking and whether Australia will successfully reach US$30 billion ETF inflows for 2025.
Magellan fund manager Nikki Thomas is to depart next month as the firm reviews its range of global equity funds and transitions her High Conviction fund.
Sydney-based alternative fund manager East Coast Capital Management has formed its first advisory council as it enters its next phase of growth.
