The trustee of the Bookmakers Superannuation Fund (BSF), Equity Trustees (EQT), has decided to defer the processing of switches and redemptions from BSF’s Balanced Investment Strategy options after its liquidity was impacted by recent global events.
EQT is pending a response from the Australian Prudential Regulatory Authority (APRA) to its request for approval to defer redemptions for a rolling 90 day period.
The decision to defer processing of redemption requests is to allow BSF more time to boost liquidity within its Balanced Investment Strategy options and ensure equitable treatment for all members.
“As you would be aware, the Accumulation Balanced Investment Strategy and the Pension Balanced Investment Strategy invest in assets such as direct shares, fixed interest, mortgages and property,” a significant event notice issued by EQT to BSF members said.
“The worldwide credit crunch and ensuing global financial crisis have contributed to some mortgage loans within the Balanced Investment Strategies being affected, for example, the loans have not been repaid within their terms.
“As result, we have had to reduce the ‘book value’ of a number of these mortgage loans.”
The affected assets have impacted the overall liquidity of the Balanced Investment Strategies, the notice said.
As trustee of the BSF, EQT, following consultation with BSF’s investment manager, administrator and promoter, has formed the view that further unrestricted redemptions from the Balanced Investment Strategies poses the risk of having an adverse effect on the remaining members in those strategies, it said.
“That is, the further redemption of liquid assets (such as shares) in the Balanced Investment Strategies to fund member redemptions, poses the risk that remaining members will become exposed to an unacceptable and unfair concentration of affected assets,” the notice said.
