Archived News for Finance Sector Professionals
ASIC has issued a new regulatory guide which outlines the circumstances under which relief will be given to investment funds from the prohibition against indirect self-acquisitions.
Indirect self-acquisition occurs where shares in a company are issued or transferred to an entity it controls. The Corporations Act 2001 voids such an issue or transfer of shares unless certain exceptions apply (refer to s259C).
Regulatory Guide 233 Indirect self-acquisition: Relief for investment funds (RG 233) provides that ASIC may grant conditional relief for investment funds and similar entities to acquire shares in their listed parent company for the benefit of investors. This relief, for example, may assist a subsidiary of a listed company that is also the responsible entity of an investment fund acquiring shares in the listed parent company on behalf of the fund under its investment mandate. ASIC may also grant conditional relief to controlled entities of listed companies engaged in index arbitrage and client-driven activities involving baskets of securities.
The guidance outlines that ASIC’s relief will be subject to conditions to address the risks associated with self-acquisitions. For instance, conditions might include a 5% limit on the total interest in a parent company that may be held by its controlled entities (subject to certain limited exclusions) and a prohibition on the voting of such shares. We will also require as a condition of relief regular reporting to the market of a controlled entity’s interests in its parent’s shares.
ASIC’s relief is likely to be used by subsidiaries of a small number of listed companies in the financial services sector who may also be subject to regulation by the Australian Prudential Regulation Authority. ASIC has previously provided relief on a case-by-case basis to these entities and has now finalised its policy after seeking feedback from industry on some issues (refer: CP 137Indirect self-acquisition by investment funds: Further consultation (CP 137); and CP 162 Indirect self-acquisition by investment funds: Further consultation – Employee share schemes (CP 162))
New practice note on financial planning in local government released
The Australian Centre of Excellence for Local Government (ACELG) today released a new Practice Note on Long Term Financial Planning. The Practice Note was prepared by the Institute for Public Works Engineering Australia (IPWEA), with funding from the Commonwealth Government's Local Government Reform Fund. It is designed to improve the financial performance of local government by assisting local councils to prepare better long‐term plans.
IPWEA President Paul Di Iulio explains: “Most infrastructure assets are long lived. They require increasing maintenance as they age and eventually need renewal. It is essential that we plan for this investment with effective long‐term financial planning.”
Local Government Minister Simon Crean welcomed the release of the Practice Note.
“Local government plays a vital role in the life of our nation, not only in the delivery of local services, but in building communities, planning for future challenges and strengthening local economies,” Mr Crean said.
No cuts for CBA as profits soar
The Commonwealth Bank has allayed fears that it will shed jobs, stemming a growing anxiety over a contagion of jobs losses throughout the sector.
New director of education for SPAA
The Self-Managed Super Fund Professionals' Association of Australia (SPAA) has appointed Graeme Colley to the new role of Director of Education and Professional Standards.
Legislation to help entitlement access
The Federal Government has introduced legislation to Parliament aimed at helping employees of abandoned companies to access their entitlements.
Changes at ANZ
ANZ has announced announced a number of senior management and organisational changes, effective from 1 March.
Hua Nan Commercial Bank to open Sydney branch
Taiwan's fifth largest bank, the Hua Nan Commercial Bank, is opening its first Australian branch in Sydney.
ASIC suspends Lifestyle Investor Services
ASIC has suspended the Australian financial services (AFS) licence of Gold-Coast based, Lifestyle Investor Services Pty Ltd (LIS), until 7 February 2013.
LIS’ licence was suspended due to concerns that LIS had not complied with conditions of its licence and had not complied with financial services laws.
In particular, ASIC’s investigation found LIS:
AXA FP practices move across to Charter
Following the merger of AXA Financial Planning (AXA FP) with AMP, AMP has assured AXA practices that there will be a smooth transition to Charter Financial Planning (Charter FP) as part of the withdrawal of the AXA brand from the Australian market.
Shorten urges banks to remember
Federal Minister for Financial Services and Superannuation Bill Shorten has urged the country’s ‘Big Four’ banks to ‘remember who backed them during GFC’.
Compensation for Trio victims starts
The Federal Government has announced that the 5,300 Australians that were affected by the collapse of Trio will start to be paid out over $54 million in compensation payments beginning this week.
New CEO appointed to ESSSuper
Mark Puli, Chief Financial Officer ESSSuper since 2009 and most recently Acting CEO, has been appointed Chief Executive Officer of ESSSuper.
New chair for AVCAL
David Brown, the former head of the private equity investment program of super fund, Victoria Funds Management Corp, is to be appointed chairman of the Australian Private Equity and Venture Capital Association (AVCAL).
RBA seeks head of economic research
The Reserve Bank is looking to appoint a head of its Economic Research Department. The Department, which operates within the RBA’s Economic Group under the Assistant Governor (Economic) Philip Lowe, undertakes longer-term research into issues relevant to monetary policy formulation and the operation of financial markets, with results published in the Research Discussion Paper series.
Government announces FRP closure
The Federal Government has announced that the Financial Reporting Panel (FRP) will be wound up, after conducting operations for six years.
Survey finds need for stronger Super preparedness
A survey by the Association of Superannuation Funds of Australia (ASFA) and Ernst $ Young has found that 38 percent of industry executives surveyed are taking active steps to take advantage of the Stronger Super reform, compared to 26% taking a pure compliance position to the reform.
ASFA figures show retirement costs stable
A couple looking to achieve a 'comfortable' retirement will need to spend $55,249 a year, while those seeking a 'modest' retirement lifestyle need to spend $31,675 a year, according to new figures released for the ASFA Retirement Standard. These figures are marginally down on the equivalent figures for the previous quarter.
RBA keeps rate unchanged
The Reserve Bank of Australia has announced it has left the official cash rate unchanged at 4.25 per cent.
AMP Capital relaunches Wholesale Australian Property Fund
AMP Capital, manager of the Wholesale Australian Property Fund which was frozen in November 2008, has announced the fund is now liquid. WAPF has assets worth $760 million comprised of 17 properties in Australia and New Zealand.
New CEO for Perpetual
The board of Perpetual Limited has appointed r Geoff Lloyd as Chief Executive Officer and Managing Director, effective immediately, following Chris Ryan’s decision to step down.
Fitch puts big four on rating watch negative
Fitch Ratings has announced it has placed the four major Australian banks’ long-term issuer default ratings and viability ratings, together with many of the other major bank’s subsidiaries, on rating watch negative.