Financial Markets Conduct (Property Schemes-Custody of Assets) Exemption Notice 2021

Summary: The Financial Markets Conduct (Property Schemes-Custody of Assets) Exemption Notice 2021 provides relief in relation to property schemes from certain requirements under the Financial Markets Conduct Act 2013 (the FMC Act) and the Financial Markets Conduct Regulations 2014. 

The main effects of the notice are that—

• existing property schemes that are closed to new investment and have transitioned to the FMC Act will not be required to have real property assets held by the scheme’s supervisor, or other independent person, provided that there is an encumbrance or a mortgage registered over that real property in favour of the supervisor
• custodians of property schemes are not required to reconcile scheme cash records daily providing that those records are reconciled with a frequency suited to the level of transactions for the scheme
• custodians of some property schemes do not need to have an annual assurance engagement with a qualified auditor of their processes, procedures, and control in relation to the scheme property providing that they obtain an assurance engagement when the supervisor determines that this is desirable in the circumstances to provide reasonable assurance in relation to custody of the scheme property. This relief does not apply to schemes managed by a large manager (i.e. a manager with more than $200 million assets under management for registered property schemes).

The notice replaces, on substantially the same terms, the Financial Markets Conduct (Property Schemes—Custody of Assets) Exemption Notice 2016, which is revoked on 17 November 2021.