6 March 2014
Managed investment schemes
The Corporations and Markets Advisory Committee (CAMAC) has released a discussion paper on managed investment schemes.
The paper deals primarily with the establishment and ongoing operation of schemes and raises a broad range of governance, disclosure and regulatory issues. It follows on from a July 2012 CAMAC report that made wide‑ranging recommendations relating to the restructuring and winding up of financially stressed schemes. Together, the two documents cover every aspect of the managed investment scheme regime, to see whether it is relevant and, if so, appropriate, having regard to the development of managed investment schemes as significant entities in Australia’s commercial activities.
The CAMAC Convenor, Joanne Rees, said:
In developing this discussion paper, CAMAC has taken the view that the regulatory regime for schemes should be aligned with that for companies, unless there are compelling reasons for treating schemes differently. Unjustified regulatory differences open the way to unnecessary complexity and impose undue compliance burdens on those industry participants who operate schemes and companies (including through stapled entities).
"The CAMAC review of managed investment schemes is the most comprehensive and detailed since the current legislative structure for schemes was introduced in 1998. CAMAC looks forward to receiving responses from industry and legal practitioners, to ensure that CAMAC’s final recommendations help promote the continuation of a sound framework for the regulation of schemes that enhances productivity in that sector and in the wider economy."
In taking this approach, CAMAC was also mindful of the Government’s commitment to the promotion of productivity, including by reducing regulatory burden on industry, consistent with its deregulatory agenda.
The paper explores ways to reduce compliance burdens. For instance, it raises the possibility of streamlining regulatory requirements by subsuming the compliance requirements for schemes into the broader risk management framework that encompasses those schemes. Also, the paper raises the possibility of extending ASIC’s modification powers to enable it to reduce regulatory requirements in appropriate cases.
In addition, the paper:
- canvasses the possibility of assisting responsible entities to manage scheme capital by providing a statutory buy‑back procedure similar to that for companies
- reviews the various disclosure requirements for schemes with a view to determining what disclosure regime would best achieve the information needs of scheme investors, while avoiding undue administrative burdens
- raises issues relating to valuation of scheme assets, which is a key factor in the pricing of scheme interests and is of particular significance for investors in unlisted schemes.
Reforms in these areas have the potential to reduce uncertainty in the marketplace and otherwise minimise undue administrative and legal compliance costs.
Other matters with which the paper deals include scheme registration, enforcement and amendment of the scheme constitution, the duties and entitlements of the responsible entity, scheme meetings, scheme takeovers and scheme reorganizations.
Copies of the discussion paper
Click here to download the discussion paper (PDF file, 1575 KB)
CAMAC invites written submissions on any aspect of its discussion paper by Friday 6 June 2014.
To make your submission, please download and use the templates provided here.
For further information, contact CAMAC at 02 9911 2950. Email: firstname.lastname@example.org