On 24 January 2012, the Australian Securities and Investments Commission (ASIC) published guidance (regulatory guide 231) on investment in infrastructure entities. ASIC has developed nine benchmarks and eleven disclosure principles for infrastructure entities. The objective of these benchmarks and principles is to improve disclosure to retail investors to help these investors understand and assess infrastructure entities to make better informed investment decisions. Regulatory guide 231 aims to assist responsible entities in understanding how to disclose against the benchmarks on an ’if not, why not basis’ and apply the disclosure principles.
The benchmarks cover an entity’s: corporate structure and management; the remuneration of management; the classes of units and shares; substantial related party transactions; cash flow forecasts; base-case financial model; performance against publicly disclosed forecasts for operating assets; distributions—if the entity is a unit trust; and updating the unit price—if the entity is unlisted and a unit trust.
The disclosure principles cover an entity’s: key relationships; management and performance fees; related party transactions; financial ratios; capital expenditure and debt maturities; foreign exchange and interest rate hedging; the entity’s base-case financial model; valuations; distribution policy; withdrawal policy; and portfolio diversification.
A Regulation Impact Statement was prepared by ASIC and assessed as adequate by the Office of Best Practice Regulation.
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