ASIC on Mon 20.5.2013, issued Consultation Paper 207 Charitable investment fundraisers (CP 207) which proposes reforms for charities that raise investment funds. The proposals do not affect fundraising by charities in the form of donations.
ASIC said it has been increasing its focus on organisations which behave like banks and conduct bank-like activities, but which are not regulated like banks. ASIC said its proposals address the risks associated with some charitable investment fundraisers that may be operating in this way. The paper proposes to either:
- remove existing exemptions available to charities that raise investment funds under Regulatory Guide 87 Charities (RG 87); or
- retain existing exemptions on the basis that they are only available to organisations that satisfy both existing and new conditions to the exemptions.
Examples of new conditions ASIC are proposing include that charities must hold 75% of their assets in assets that directly relate to their charitable purpose; and where the fund is offered to retail clients: (i) have an Australian financial services licence; and (ii) meet minimum capital and liquidity requirements.
ASIC said the amendments to the existing exemptions would be phased in over several years and be subject to a transition period.
COMMENTS on CP 207 are due by 15 July 2013.
Source: ASIC media release 13-110MR, 20 May 2013
[LTN 95, 20/5/13]