ASIC today released new disclosure benchmarks and principles for infrastructure entities to improve investor awareness of the risks associated with investing in these products.

The risks of investing in infrastructure entities were highlighted during the global financial crisis. The response of retail investors to loss of capital experienced during the crisis indicated that existing disclosure did not effectively communicate an understanding of the characteristics and risks of infrastructure entities to investors.

Regulatory Guide 231 Infrastructure entities: Improving disclosure for retail investors (RG 231) outlines nine benchmarks and eleven disclosure principles that apply to infrastructure entities, aimed at addressing the risks peculiar to infrastructure entities.

ASIC Chairman Greg Medcraft said, ‘It is one of ASIC’s priorities to ensure that investors and financial consumers are confident and fully informed before they invest in financial products. Improved investor understanding of the infrastructure sector and effective disclosure of investment risk is particularly important because there is an increasing tendency for infrastructure to be funded by capital raised from the general public.

‘These disclosure benchmarks and principles, developed after an extensive period of industry consultation, respond to concerns of many retail investors that they did not properly understand the complex business and operational characteristics or risks associated with infrastructure entities’, said Mr Medcraft.

Responsible entities of infrastructure entities must disclose the benchmark and disclosure principle information in any existing and new disclosure dated on or after 1 July 2012.

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Further details are available at ASIC.

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