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Monday, 22 June 1998
Page: 3652

Senator MARGETTS (8:07 PM) —by leave—I move:

(10) Schedule 1, item 1, page 24 (line 21), after "may", insert ", with the approval of the ASC,".

(11) Schedule 1, item 1, page 25 (after line 8), at the end of section 601HE, add:

(3) The responsible entity must give notice in writing to members of any modification to the compliance plan, or of a new compliance plan, 21 days before lodging the proposed changes with the ASC under subsection (1).

(4) The responsible entity must send a copy of the scheme's compliance plan to a member of the scheme within 7 days if the member asks the responsible entity, in writing, for the copy, and must not charge the member any fee for the copy.

(5) A summary of the compliance plan of a managed investment scheme:

(a) must be contained in every prospectus issued in respect of the managed investment scheme; and

(b) must set out the main provisions of the compliance plan.

What we are looking at here is access to the compliance plan. Greens (WA) amendment No. 10 relates to approval—that approval by the ASC is required for all changes to the compliance plan. Amendment No. 11 requires that members must be given notice of changes to the compliance plan, that they will have access to the compliance plan and that new members should be able to inspect the compliance plan. I find it amazing to think that there should be some concept that this should not happen.

Why do we think this should happen? It is a document of fundamental importance for investor protection. The bill replaces compliance supervision by an independent trustee with supervision by either a majority of independent directors—that means a minority could object—or by a compliance committee. In either case, the compliance plan is the blueprint for compliance with the Corporations Law and the scheme's constitution. Like the scheme's constitution, the compliance plan is a document of fundamental importance for the scheme, including provisions for the manner in which scheme property is to be identified and held, when assets are to be valued, ensuring adequate record keeping and so on. It also provides notice of information of investors.

Under the bill, changes to this document may be made without notice to investors, like the constitution. Investors should have notice of changes to the compliance plan to be able to assess any potential implications of the change. This amendment requires 21 days notice to members of any changes. It requires access and members should be able to receive a copy of the compliance plan free of charge, similar to what we said under the constitution. The scheme exists for the benefit of members, and members should face no impediments in receiving information about their investment scheme. It should provide access for new investors to free and informed choice. Why not? Because the compliance plan is of fundamental importance to the running of the scheme and to investor protection. A summary of the plan should be attached to the prospectus so that investors may judge for themselves whether or not the scheme is something they would wish to invest in. Such a requirement promotes free and informed choice. I commend this amendment to the Senate.

The TEMPORARY CHAIRMAN —The question is that the amendment moved by Senator Margetts be agreed to. Those of that opinion say aye; against—