Australian Securities Investments Commission ASIC Notes

ASIC Notes

Australian Securities Investments Commission ASIC

Periodically, the Australian Securities and Investments Commission (ASIC) will front representatives of the financial services industry to work through their position on topical issues. There were around 45 people in attendance, including around 15 ASIC staffers. On this occasion Malcolm Rodgers (Exective Director, Regulation) and Jennifer O'Donnell (Executive Director, Compliance) dispensed with a formal agenda.

The meeting started with Malcolm calling for matters of interest/concern from the flooor. None of the matters raised by attendees had specific relevance to hedge funds and the following presentations by Malcolm and Carole did not highlight hedge funds. This seems to confirm that ASIC is taking the view that hedge funds should be judged against the criteria set for all managed investment schemes. This is both sensible and commendable.

Some of the items discussed/presented included:

1. Mutual securities recognition, particularly NZ (complying with the law in NZ indicates complying with the law in Australia). ASIC can still intervene as regulator.

2. IDPS disclosures to the ultimate client; class order imminent

3. New ASIC website and simplification of future ASIC outputs; now limited to consultation papers, regulatory guides (including all policy statements and guidance notes), information sheets and reports.

4. Breach reporting; reported breaches have risen from 292 in first half 2006 to 508 in second half 2006. Highlighted importance of retaining a breach register.

5. Unit trust pricing; requirement for policy by May 2007 now imminent.

6. Disclosure; generally, risk disclosure not sufficiently prominent or specific, poor compliance with required fee discloure, concerns about "rubbery" forecast returns, clarity of PDS's still not right and concerns about "image" advertising.

By Rick Steele

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Tags: Australian Securities Investments Commission ASIC, ASIC, Australian Securities Investments Commission, Australia Security Investment Comission, SEC Australia

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