The Australian Securities and Investments Commission (ASIC) has commenced a targeted review that may help boost investment in property by the country's superannuation funds.
The review will focus on requirements to disclose stamp duty payments in Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements. Concerns have been raised that the disclosure impacts performance test results and discourages investment in property by superannuation funds.
ASIC chair Joe Longo said the agency was responding to consultation at the recent investor roundtable convened by the treasurer.
“This is exactly the sort of actionable idea to address regulatory issues ASIC is open to testing. If the review finds appropriate changes will deliver benefits without undermining disclosures, then ASIC will act,” said Mr Longo.
“We want to ensure red tape is not unnecessarily holding back investments. A significant portion of Australia’s A$4tn ($2.61tn) superannuation system already invests in property assets, but we have heard there is appetite for more. This review will allow us to look at the way our regulations govern the calculation of fee-adjusted returns and encourage transparency and investment in our economy.”
Mr Longo also said the review would also consider whether class order relief should be given to bring consistency to how internally and externally managed private credit arrangements are disclosed.
“A change like that could encourage internal management meaning lower costs for superannuation members as well as continuing to support safe credit growth for business borrowers,” he said.
The review will be led by ASIC and include industry representatives, and treasury. The review will report by 30 November.