On 7 November 2011, ASIC released details of new financial requirements for responsible entities of registered managed investment schemes.
Whilst the changes introduce more onerous financial requirements than the current requirements, One Investment Group welcomes the changes as we believe they provide greater investor confidence and improve the integrity of the registered managed investment scheme market.
These new requirements will come into effect next year on 1 November 2012, and are the first changes since the current financial requirements were introduced in 2002.
Why do we need the changes?
The changes were deemed to be required because of:
What are ASIC’s objectives?
ASIC hopes that the changes will assist in ensuring that for responsible entities of registered managed investments schemes:
What are the key changes?
In summary, the 3 main changes are as follows:
Cash needs requirement: responsible entities must prepare a rolling cash flow forecast covering at least the next 12 months on what is reasonably likely to occur. The directors of the responsible entity must approve the cash flow forecast at least quarterly.
NTA requirement: responsible entities must hold the greater of:
Liquidity requirement: responsible entities must hold at all times:
In order to fully understand the nature and terms of the new financial requirements, including a number of new definitions, please refer to ASIC’s website, where the changes are described in more detail and copies of relevant new regulatory documents can be found.