An ongoing enquiry into Australian financial services has a welcome discussion on social ventures and SIB structures and usage in particular…Welcome to Thursday’s SIB news.
Financial Services Inquiry Targets Impact Investment
Pro Bono Australia
Reducing regulatory burdens and providing greater guidance are among the recommendations for the improvement of the impact investing market made by the Federal Government’s Financial Services Inquiry.
Recommendations in the interim report centred on the addressing of existing barriers to impact investment, despite submissions proposing more active Government involvement – including the provision of risk capital to attract initial investments, developing a dedicated social investment bank and introducing tax concessions.
The inquiry acknowledged that mobilising the impact investment market might require government support, including removing barriers such as:
Some superannuation trustees consider their fiduciary duties to be a barrier to impact investment.
Private and public ancillary funds providing a link between donors and organisations that can receive tax deductible donations are unclear whether they may count discounted returns toward minimum distribution requirements.
Some private ancillary funds do not meet sophisticated or professional investor tests under the exemptions from the prospectus regime, despite very high net worth individuals or organisations having established them.
Relatively simple instruments, such as social impact bonds, are subject to onerous disclosure requirements.
“Government could provide guidance to superannuation and philanthropic trustees by explaining how superannuation trustees can facilitate impact investment within the existing regulatory framework,” the interim report said.