No additional private equity regulation needed: IFSA

Richard Gilbert

The Investment and Financial Services Association (IFSA) has made a submission to the Government expressing its view that no additional regulatory measures are needed in relation to private equity deals.

The submission was made as part of the Senate Standing Committee on Economics inquiry into Private Equity Investment currently being held in Canberra.

The industry body has cited three main reasons for its stance on this subject, the first being that these types of transactions do not lead to situations that spark new regulatory issues.

IFSA also feels that while private equity deals can create governance issues that have to be dealt with properly, these have to be managed on a case-by-case basis rather than with a general approach.

IFSA also believes the private equity deals that have been proposed and completed in the market have not caused any significant shifts in capital away from the publicly listed regulated sector.

Furthermore, the industry association has expressed its feelings that the private equity sector in this country is evolving in-line with global experience in this area, that these transactions help to promote competition in the quest for corporate control, that they provide greater opportunities for expansion by local organisations, and that they offer an alternative capital raising mechanism from public markets.

IFSA chief executive Richard Gilbert said: “IFSA is supportive of private equity investment and believes that, like any other form of investment, it presents its own set of unique risks and opportunities, which investors must appreciate.

“The submission also outlines the current regulations affecting private equity transactions, and further puts the case to the Senate that, in IFSA’s view, there would not appear to be any compelling need for additional regulation,” he added.