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New standards for the responsible entities (REs) and custodians of managed investment schemes will come into effect on January 2, in line with some of the recommendations made earlier this year by the Parliamentary Inquiry into the Trio collapse.
It is the biggest revision to ASIC’s Regulatory Guide 133 (Managed investments and custodial or depository services: Holding assets) since it was first issued in 1998. In issuing these new standards, ASIC seeks to address what it says are “the emerging risks and challenges presented by the major changes affecting the managed investment scheme and custodian industries”.
The changes to RG 133 and the associated Class Orders include:
- Asset holders to meet minimum standards on organisational structure, staff capabilities, and resources.
- Asset holders perform adequate checks to ensure any other asset holder it engages holds the property on trust.
- Asset holders report within 10 business days if they suspect that the responsible entity has failed to report breaches to ASIC, as required by the Corporations Act.
- Additional protections for investors in primary production schemes, including agribusiness schemes.
- Responsible entities being allowed to hold certain types of assets, such as derivatives, private equity and certain types of bank accounts without meeting the relevant NTA requirements.
The changes will apply to newly established REs and other newly licensed asset holders from January 2, 2014.
Current REs will have to comply with the changes from January 2, 2015, along with current platform operators, licensed custodians and Managed Discretionary Account (MDA) operators.
Primary production and agribusiness schemes with interests on issue after January 2, 2014 have until July 1, 2014 to comply.
How CompliSpace can help
Australian Financial Services Licence holders are inundated with a raft of corporate governance obligations and an ever-growing compliance burden, which can easily distract focus away from core business activities.
CompliSpace delivers industry specific web-based policies, programs and procedures that can be quickly tailored and configured to suit an organisation’s needs and are kept up-to-date with legal and regulatory changes by our team of specialists.
Our team of compliance professionals and lawyers combine extensive expertise with practical technology-enabled solutions to simplify the complexity of the regulatory environment and allow our clients to focus on allocating resources toward improving financial performance.
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This blog is a guide to keep readers updated with the latest information. It is not intended as legal advice or as advice that should be relied on by readers. The information contained in this blog may have been updated since its posting, or it may not apply in all circumstances. If you require specific or legal advice, please contact us on (02) 9299 6105 and we will be happy to assist.
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