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Updated commentary from ASIC

FIVE compliance plan commentaries have been released to act as practical guidance for operators of managed investment schemes to help with their compliance under Chapter 5C of the Corporations Act.

Australian Securities and Investments Commission executive director financial services regulation Ian Johnston said the commission’s focus was to ensure industry had the right measures in place to monitor and address compliance risks.

"The commentary papers have been developed as further assistance to industry particularly at a time when industry members may be revising their compliance plans to reflect new obligations in the Financial Services Reform Act," he said.

Included in the release are two new commentaries for mortgage schemes and three revised compliance commentaries for financial asset, property and agricultural schemes.

The mortgage scheme commentaries provide practical examples of better compliance plans.

They include a precise guide on the recommended practice in areas such as borrower assessment, valuations and default handling procedures.

The commentaries have been tailored to the two main types of mortgage schemes: contributory and pooled.

The three revised compliance plan commentaries have been re-released to provide further examples of better compliance plans in terms of quality and content.

The updates are based on a comprehensive review of a large number of compliance plans, breach notifications and compliance plan audit reports that have been lodged with ASIC over the past two years.

"The mortgage commentaries are particularly important in view of the ASIC inquiry into the State-regulated solicitors’ mortgage schemes and the serious issues that were highlighted as a result of that inquiry," Mr Johnston said.

"The commentaries have adopted a number of recommendations from the report on the outcomes of the inquiry; particularly those supported by ASIC’s findings from its surveillance visits.

The commentaries are available at www.asic.gov.au/fs on the "compliance" page.

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