The submissions were in response to Consultation Paper 196: Periodic statements for quoted and listed managed investment products and relief for AQUA products (CP 196), released by the Australian Securities and Investments Commission (ASIC) in December 2012.
The paper asked the industry to comment about its proposed relief grants for periodic statements and facilitating quotation of exchange traded funds (ETFs) for providers of quoted and listed managed investment products and AQUA products.
Issuers were generally in support of ASIC’s proposals, and the regulator consequently granted relief to issuers of AQUA quoted and listed management investment schemes to ease the burden of preparing periodic statements for scheme members.
It also granted relief to facilitate the quotation of ETFs on the AQUA market, which will save issuers from having to apply for individual relief in most circumstances for each new ETF they quote on the AQUA market.
Most respondents strongly supported ASIC’s proposal that statements would no longer be required to include a termination value if this value is the same as the closing balance, with respondents stating it provided no benefit to investors ASIC decided to implement this under the class order relief.
ASIC will also eliminate the requirement to report any increase in holding in the scheme, reflecting the strong respondent support.
A majority of respondents also agreed with the proposal that periodic statements should report the performance of the scheme in relation to the investment strategy. Under the order this will have to be done on a one- and five-year basis.
There was strong opposition towards the proposal of using net asset value or market price as a price proxy as respondents said there would be no practical benefit to investors and could in some cases cause confusion. ASIC responded to this adjusting the class order so that issuers are not required to report the monetary value of transactions when they don’t know the transaction price, but stated they must list the transaction date and number of units transacted.
In terms of the AQUA market, respondents were generally in favour of ASIC’s relief proposal regarding the delayed disclosure of index or portfolio information to members who are non-authorised participants. They also supported ASIC’s proposal that the ETFs acquisition and withdrawal facility would not give authorised participants a relevant interest in the securities that comprised the ETF. Both of these proposals will also be implemented under the order.
ASIC will also give substantial holding relief if the issuer has published the basket of securities for the day it assesses its obligations. One respondent argued, however, that requiring issuers to publish the basket of securities on a daily basis could result in ongoing costs.
