ASIC has issued Class Order that provides relief that facilitates retail clients applying for interests in managed investment schemes through mFund Settlement Service (mFund).
mFund is a facility jointly operated by ASX and ASX Settlement Pty where requests for the issue or redemption of interests in unlisted managed investment schemes can be made, and holdings recorded through CHESS. It is not a trading facility.
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ASIC received positive feedback in response to our proposals to provide this relief.
The key aspects of CO 13/1621 are:
- it exempts responsible entities (REs) of managed investment schemes available through the mFund from only issuing interests in response to an application form that was included in or accompanied a PDS, and
- REs will generally be allowed to issue on the basis of an electronic message through mFund indicating that the investor has been given the current version of the PDS.
The sender of the electronic message must be an Australian financial services (AFS) licensee or an authorised representative and must not send an electronic message unless the investor has been given the latest product disclosure statement (PDS) for the scheme.
Greg Tanzer, Commissioner, said: "This relief assists in making the industry more efficient without compromising investors receiving a product disclosure statement before investing. This will make the process of acquiring and disposing of interests in managed investment schemes more efficient and lower operational costs for the investment management industry as a whole."
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By GlobalDataAlso, in order to facilitate the operating of mFund, Assistant Treasurer Senator Arthur Sinodinos has declared mFund is an exempt market. This means ASX Settlement will not have to hold an Australian Market Licence and a revised set of ASX Operating and ASX Settlement Operating Rules have been made.
Under these rules, there are several safeguards to ensure disclosure is received by investors, including specific responsibilities on licensees to provide an up-to-date PDS and on REs to check receipt with retail investors. Also, the use of mFund is limited to simple managed investment schemes.
In addition ASIC has exempted ASX and ASX Settlement from requiring an AFS licence for operating mFund. ASX already has an Australian Market Licence for operating its financial markets and ASX Settlement has a Clearing and Settlement Licence.
With the completion of these regulatory steps barriers have been removed under the Corporations Act to the ASX being in a position to launch mFund.
