Submissions - Australian Stock Exchange
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12 November 2001
Managed Investments Act Review
C/- Financial Markets Division
PARKES ACT 2600
Fax: (02) 6263 2882
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.
Assistant National Counsel, Companies