For example, with
an unlisted mortgage scheme:
If you plan to invest in
an unlisted mortgage scheme, consider what will happen if you need to get your money out quickly.
If you're investing in
an unlisted mortgage scheme, check what the responsible entity plans to do with your money.
On paper,
unlisted mortgage schemes might seem like a safe, mainstream investment.
Investing in
unlisted mortgage schemes is riskier than term deposits offered by banks, building societies and credit unions that are prudentially regulated in Australia (see below to compare these investments).
Here's how you can use ASIC's benchmarks and disclosure principles to assess the risks in
unlisted mortgage schemes:
ASIC has developed eight benchmarks and eight disclosure principles for
unlisted mortgage schemes to help you assess the key risks.
* The benchmarks and disclosure principles apply to
unlisted mortgage schemes from 1 January 2013.
We suggest you put no more than 10 % of your money (if any) into
unlisted mortgage schemes.
ASIC has developed eight benchmarks and eight disclosure principles for
unlisted mortgage schemes to help you assess the key risks (see pages 14 - 37).
A primary risk with
an unlisted mortgage scheme is that the scheme might not generate enough cash flow to meet its costs and debt repayments, and be unable to pay you distributions or return your money when you ask for it.
There are differences between listed and
unlisted mortgage schemes that can make it harder for investors to easily know what's going on with their investment.
As a result of the global financial crisis, many
unlisted mortgage schemes had insufficient liquid assets to repay investors at the end of their investment terms, or to allow early withdrawals.
Not exact matches
Mortgage schemes are usually
unlisted, meaning it is not listed on a public market.
For more about the risks of debentures and
mortgage funds, see our booklets Investing in
unlisted debentures and unsecured notes and Investing in
mortgage schemes.