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Ongoing disclosure vital for unlisted property investment

30 July 2014: The Property Funds Association of Australia (PFA) acknowledges the review reported by the Australian Securities and Investment Commission (ASIC) on 24 July 2014 relating to ongoing disclosure to investors in unlisted property funds.
The ASIC review found that “unlisted property schemes were failing to adequately disclose against benchmarks put in place to improve investors’ awareness of the risks of investing in these products”.
The PFA understands that only a small sample of unlisted funds were reviewed by ASIC and the report’s findings do not necessarily mean that the majority of unlisted property funds have similar issues. Further, following discussion with ASIC, the PFA understands that the main findings relate to disclosure against benchmarks to meet RG46 ongoing disclosure obligations, rather than PDS disclosure. These benchmarks have been a requirement since 1 November 2012. 
According to the CEO of the PFA, Paul Healy: “The RG46 benchmarks and disclosure principles have largely been embraced by the unlisted fund industry in its PDS disclosure since its introduction in 2012 and PFA believes that it has enhanced the investor experience. The PFA welcomes ASIC’s review and we will engage with our members and industry to improve their understanding of the need to continue to disclose against the benchmarks even after a PDS is issued.”  
Mr Healy went on to say that ASIC’s findings and moves on this issue are a timely reminder to unlisted fund managers of their ongoing disclosure obligations. 
“We encourage our fund manager members, and the industry at large, to ensure they are meeting their compliance obligations. Regular educational events keep members up to date with changes to regulatory requirements,” he said.
“The PFA looks forward to continuing to engage with ASIC on this issue. We welcome all opportunities to represent the interests of our sector.”

 

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