More regulation likely for proportionate schemes
The Financial Markets Authority has signalled its intention to overhaul the class exemption notice for the schemes, which are currently more lightly regulated than formal property syndicates.
The current exemption expires on September 30.
Under the proposed changes, all issuers would be required to register a prospectus and investment statement, and appoint a statutory supervisor. The FMA intends to issue guidance to assist market participants with the disclosure requirements of the prospectus and investment statement as they relate to these schemes.
“There are significant risks particular to real property proportionate ownership schemes that need to be better understood,” said FMA Head of Primary Regulatory Operations Sue Brown. “These changes will provide investors with the information they need to make informed decisions before investing in these schemes.”
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