Review of the Managed Investments Act 1998

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12 November 2001

Managed Investments Act Review
C/- Financial Markets Division
The Treasury
Langton Crescent
PARKES ACT 2600
Fax: (02) 6263 2882
e-mail: miareview@treasury.gov.au

Dear Sir,

Review of Managed Investments legislation

We understand that the closing date for submissions was 7 September 2001 and I apologize for the late provision of this submission on behalf of Australian Stock Exchange Limited ("ASX"). Unfortunately, our attention was not drawn to the Review until today.

We wish to briefly draw to the attention of the Review to the following.

  • The legislation does not explicitly address the issue of potential liability of scheme members if the scheme fails. It would be desirable in the interests of certainty for it to be made clear that scheme members are in the same position as shareholders in a company; ie their liability to meet scheme debts is limited to payment of any amounts outstanding on partly paid interests in the scheme. This issue was raised by ASX at the time of enactment of the legislation, on the basis that prospectuses for offers of units in a trust invariably warn investors that the issue is not completely settled and there is a possibility that they may be liable for trust debts.
  • Unlike companies, schemes are not required to hold an annual general meeting. It has been suggested that ASX introduce a listing rule requirement for a listed trust to hold an annual general meeting. ASX did not consider it appropriate for it to do so, given that the managed investments legislation provides a comprehensive code for the regulation of such matters as scheme meetings. However, ASX urges the Review to consider the desirability of introducing a legislative requirement for an annual general meeting. ASX would not oppose the imposition of such a requirement.

Yours sincerely

Shannon Lindsay
Assistant National Counsel, Companies

 

 

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