New disclosure rules for unlisted mortgage and property schemes will better explain risks involved, ASIC has said.
ASIC released yesterday a draft guide of new disclosure rules for unlisted mortgage and property schemes.
The guide is intended to give retail investors a better understanding of the risks involved in these schemes.
New product documents will have to comply with the new benchmarks from 31 October 2008 or explain why this is not possible, under the so-called 'if not, why not' rule.
Companies are also urged to provide existing clients with amended disclosure documents by this date.
The turbulence in debt and equity markets since late 2007 and a softening in the real property market has increased the financial stress on some sectors, leaving investors exposed.
"Our work with unlisted and unrated debentures highlighted to us the need to put greater ASIC resources into the unlisted and unrated areas of investment," ASIC chairman Tony D'Aloisio said.
In compiling information for the draft guide, the regulator profiled 200 unlisted mortgage funds, which represent about $42 billion in funds under management, and 300 unlisted property schemes, which represented approximately $32 billion in assets. ASIC puts the total value of unconsolidated funds under management at $1.6 trillion.
Companies are invited to provide feedback on the new disclosure rules by 5 August this year.
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