Issues surrounding unlisted property disclosure proposals

The regulator’s proposed disclosure principles for unlisted property funds could negatively impact the industry’s move towards shortened, more streamlined Product Disclosure Statements, according to the Australian Direct Property Investment Association (ADPIA).

In responding to the Australia Securities and Investments Commission’s draft regulatory guide for improving disclosure for unlisted property trust investors, ADPIA said the introduction of the proposed principles could lead to an increase in the length of retail offer documents.

“This will make it even more difficult for fund managers to produce four-page Product Disclosure Statements in line with the apparent wishes of the Federal Government’s current Financial Services Working Group,” Matthew Moses, a spokesperson for ADPIA’s issue and lobbying committee, said.

Moses said that while ADPIA welcomed increased disclosure regarding unlisted property funds, it felt incorporation by reference should be considered for keeping the length of Product Disclosure Statements to a minimum.

Also included in ADPIA’s submission to the regulator were concerns over the short timeframe being imposed for implementation of the principles, uncertainty with respect to how the new disclosure principles will apply to open offer documents already in the market and specific issues in relation to some of the information required to be disclosed.