Latest news and announcements
Possible unsolicited offers to purchase holdings in the Colonial First State Mortgage Income Funds
Investors in the Mortgage Income Fund and Mortgage Income Fund - Nil Entry Fee may receive an offer to purchase some or all of their investment in the funds. Documents received by investors may have an ’official’ look, but we stress these types of offers have no association whatsoever with the Commonwealth Bank of Australia, Colonial First State or any other member of the Commonwealth Bank group.
We expect that the offer could be for an amount less than the amount which investors could otherwise expect to receive over time for their holding, and may be on terms and conditions (including the method and time period over which payments are made) which may not suit their circumstances. Colonial First State is concerned investors may accept this offer without understanding the full ramifications of the offer, which may not be to their benefit or suit their individual circumstances. Before accepting any offer, we recommend investors speak with their financial adviser or call us on 13 13 36.
ASIC expands hardship relief for investor withdrawals
Updated June 2010
On 17 August 2009, the Australian Securities and Investment Commission (ASIC) announced changes to hardship withdrawals from frozen mortgage funds. These changes expand the circumstances in which ASIC will grant relief to enable fund managers to make payments to investors who demonstrate the need to access funds on hardship grounds. On 17 September 2009, ASIC issued Colonial First State with expanded hardship relief.
The changes to the existing hardship relief provisions include:
1. The cap on hardship withdrawals for each investor is changed to $100,000 each calendar year, this was previously $20,000 plus 50% of the investor’s interest;
2. An investor can make up to four hardship withdrawals each calendar year, instead of a once-only withdrawal (subject to the overall cap of $100,000 per calendar year); and
3. Hardship grounds have been expanded:
(a) To cover a beneficiary of a deceased estate of an investor, where the beneficiary is suffering hardship; and
(b) To include those unemployed for at least three months without any other means of financial support (except government assistance, such as unemployment benefits).
The relief permits urgent payments to be made provided you can prove you are in a position of severe financial or personal hardship, are unemployed for three months or permanently incapacitated.
The relief applies to the following investment products which are currently frozen:
- FirstChoice Investments – Colonial First State Income
- FirstChoice Wholesale Investments – Colonial First State Wholesale Income (also known as Colonial First State Wholesale Income Fund)
- Colonial First State Managed Investment Funds – Mortgage Income Fund*
- Colonial First State Managed Investment Funds – Mortgage Income Fund Nil Entry Fee*
- Colonial First State Bricks & Mortar Fund
- Colonial First State Wholesale Guaranteed Mortgage Fund*
Financial Hardship for terminated funds
* This fund terminated on 1 March 2010. We have recently received relief from ASIC to accept withdrawal requests from this fund on the basis of financial hardship. However, additional conditions apply to this fund as it is under termination. If you believe you are eligible for a withdrawal on the basis of financial hardship, please contact your financial adviser or call us on 13 13 36 for further information.
Please refer to the ASIC hardship relief guidelines for definitions and conditions that apply to the ASIC approved withdrawals.
Is the Colonial First State Mortgage Income Fund subject to income deeming rules?
In March 2010 we applied to Centrelink to gain an exemption for all investors in the Mortgage Income Fund and Mortgage Income Fund - Nil Entry Fee from the Centrelink income deeming rules, based on our expectation that these funds would not pay income distributions for at least 18 months (the deeming rules assume financial investments are earning a certain level of return, regardless of the actual level of return). This application has recently been declined.
However, investors can apply to Centrelink for financial hardship relief on an individual basis. There are a number of criteria that must be met, including holding an unrealisable asset and having income and readily available funds below a certain limit. If you wish to apply to Centrelink for financial hardship relief, please speak to a Centrelink Financial Information Service Officer at your local Centrelink branch or call Centrelink on 132 300.
How do I apply for a withdrawal on hardship grounds?
If you believe you are eligible to apply on these grounds please call us on 13 13 36, 8am to 7pm, Monday to Friday, Sydney time, so we can better understand your circumstances and determine the appropriate application form for you.
Archived related material
Hardship relief for investors - September 2009