ASIC releases consultation paper relating to debentures and advertising
ASIC has released a consultation paper on proposals that would revise ASIC’s policy on how debt securities can be described in offer documents and the preferred form of advertising for these instruments.
The proposals are in response to submissions from industry participants expressing concerns about our decision in June last year to discontinue the no-action position in relation to certain non-compliance with the debenture naming restrictions.
Consultation Paper 151 Debt securities: modifying the naming provisions and advertising requirements sets out ASIC’s proposals to:
- introduce class order relief to provide for a new class of debt security (in addition to the current classes of ‘debenture’, ‘mortgage debenture’ and ‘unsecured note’) called a ‘note’, providing certain conditions (including sufficiency of security) are met; and
- revise ASIC’s advertising standards for offers of debt securities and interests in mortgage schemes, in particular the standards relating to risk of loss and comparing these types of securities with bank deposits.
ASIC is seeking comments on the proposals in the consultation paper by 6 May 2011. The discussion paper is available at http://www.asic.gov.au/asic/asic.nsf