ASIC has released Regulatory Guide 232 Agribusiness managed investment schemes: Improving disclosure for retail investors (RG 232) outlining five benchmarks and five disclosure principles that apply to all agribusiness schemes as well as an Investor Guide to improve investor awareness of the risks associated with these products.

Agribusiness schemes must disclose whether they meet the benchmarks and if not, why not. ‘Why not’ means explaining how they will deal with the business factor or the issue underlying the benchmark.

Agribusiness schemes pose particular risks for investors because they enter into contracts with the responsible entity or other parties to perform all the cultivation and management activities associated with the investor’s agribusiness enterprise.

RG 232 also outlines the standards ASIC expects responsible entities to meet when advertising agribusiness schemes to retail investors and guidance as to clear, concise and effective disclosure of the benchmark and disclosure principle information.

Responsible entities of agribusiness schemes should disclose the benchmark and disclosure principle information in any product disclosure statement dated on or after 1 August 2012.