Corporate watchdog Australian Securities & Investments Commission (ASIC) has proposed to improve disclosure for retail investors considering investing in unlisted property schemes.

This comes following an ASIC review into the $28 billion unlisted retail property sector where it found a number of key disclosures were not adequately addressed.

Some of these issues included the risks associated with the borrowing maturity profile and the extent of hedging; details about property development activities and withdrawal rights and the risks associated with withdrawal arrangements promoted to investors.
ASIC chairman Greg Medcraft said one of ASIC’s priorities is to focus on promoting confident and informed investors and financial consumers.

“These proposals are aimed at improving the level, comparability and consistency of disclosure provided to retail investors by extending our ‘if not, why not’ benchmark disclosure model to unlisted property schemes,” he said.

“Our experience indicates that investors need better quality and relevant disclosure, presented in a way best suited to investor understanding.
“PDSs must be worded and presented in a clear, concise and effective manner to help retail investors assess an offer and make informed investment decisions.”

ASIC has proposed 1 July 2012 as the start date for responsible entities to disclose against the benchmarks and amended disclosure principles.