The funds management industry is undecided on whether the Government offer to extend the bank deposit guarantee to participants in authorised deposit-taking institutions (ADIs) is a positive initiative.
A number of fund managers InvestorDaily contacted, along with the Investments and Financial Services Association (IFSA), were still trying to obtain more information on how the arrangement would work.
“Over the past few days, there has been considerable comment on the state of the financial market and regulatory position of investment management funds in Australia,” IFSA chief executive Richard Gilbert said.
“IFSA notes the Government’s announcement for special funding to fast track procedures for mortgage trusts to become ADIs under the APRA regime.”
“We would welcome further detail, and we will liaise with Government, so IFSA member companies can make a decision which is in the interests of both unit holders and the single responsible entity,” he said.
Colonial First State was one of the few managers to issue an official response yesterday.
“Colonial First State is assessing its position in relation to the Federal Government’s announcement on 28 October,” the statement said.
Axa was more definitive in its assessment of the scheme. “Axa does not see becoming an ADI as a solution to this issue for our customers,” an Axa spokesperson said.
The Australian Direct Property Investments Association (ADPIA) also met with Treasury yesterday to discuss the effect the Government’s bank deposit guarantee was having on the direct property investment sector.
“There is… a very large degree of fear and uncertainty, creating volatility and drain on capital across all asset classes,” ADPIA president Linden Toll said.
“While there is no easy fix, we believe that with measured steps, investors can be reassured of the long-term, strong fundamentals of our market.”
