ABSF - AOFM Operational Notice
On 11 April the Australian Office of Financial Management (AOFM) released an Operational Notice relating to the Australian Business Securitisation Fund (ABSF). The notice provided an update on the implementation of the Fund following the legislation (ABSF Act 2019) receiving royal assent on 5 April.
The AOFM, as administrator of the ABSF, has concluded that due to the heterogenous nature of the market, a detailed prescriptive set of investment guidelines is unlikely to be fit-for-purpose, and therefore the AOFM will take a principles-based approach.
The AOFM specifically states that it is developing a number of principles to act as assessment criteria against which investment proposals will be evaluated. The principles are expected to be released by late May in draft form for industry comment.
While the ABSF Act 2019 authorises the Fund to undertake investments from 1 July 2019, the Operational Note has made it clear that the Fund will only be investing in securities backed by SME loans originated from the date of the Operational Notice, being 11 April 2019. The AOFM will call for investment proposals to invest in as soon as the investment principles have been finalised and released.
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