The corporate watchdog is monitoring illiquid asset valuations of responsible entities, given the increased economic and financial uncertainties stemming from the COVID-19 pandemic.
The Australian Securities and Investments Commission (ASIC) said responsible entities might face issues such as a lack of comparable transactional data, and uncertainties around cash flow forecasts, the shape and timing of any economic rebound, the selection of an appropriate discount rate in an environment of very low government bond yields, and the risk premiums that should be attached to the risk free rate.
“As a result, responsible entities may need to carry out valuations more often to ensure reliable asset values and member unit prices,” ASIC said.
“Where valuations are uncertain for a material proportion of a fund’s assets, the responsible entity needs to consider whether it is in a position to establish a reliable unit price. If not, the responsible entity may need to temporarily suspend entry and exit from the fund.
“…it is more important than ever that valuations of managed fund assets are regular, robust and reasonable.”
It said accurate valuation of fund assets, including illiquid assets, was needed for a responsible entity to determine:
ASIC noted that while the pandemic continued to disrupt markets, it encouraged responsible entities to ensure:
The property group, owned by industry super fund Aware Super, has announced two new projects with a total construction value of $320 million that will add more than 700 homes to Melbourne’s rental market.
While institutional investors, including super funds, unanimously acknowledge the energy transition as a significant challenge, their perspectives on the extent of their involvement in addressing the substantial capital requirements vary widely.
Despite a period of increased volatility, several considerations suggest that the bull market will remain intact and the trend in shares will remain up, an economist has suggested.
HESTA has slammed Woodside’s climate transition action plan, pointing to “significant” gaps.
It's more important than ever to increase valuations a couple of days out from yearend if you've had a bad year.
Add new comment