Australia Yearbook - 2001

892 Year Book Australia 2001
26.11 FINANCIAL INTERMEDIARIES N.E.C., Financial Assets
Amounts outstanding at 30 June
1998
1999
2000
$m
$m
$m
Public unit trusts(a) 54 005 68 100 81 101
Equity unit trusts 34 540 42 842 52 003
Other unit trusts 19 465 25 258 29 098
Common funds 6 890 7 592 8 099
Securitisers 33 185 45 447 63 978
Cooperative housing societies 1 170 n.y.a. n.y.a.
Other(b) 70 043 n.y.a. n.y.a.
Total 165 294 158 249 199 030
(a) Excludes property and trading trusts. (b) Includes investment companies, Category J financial institutions, economic
development corporations, fund managers, insurance brokers, hedging instrument arrangers, wholesale trusts, and State
government housing schemes.
Source: Australian National Accounts: Financial Accounts (5232.0); Managed Funds, Australia (5655.0); Annual Statistics on
Financial Institutions (5661.0.40.001).
Public unit trusts are investment funds open to
the Australian public. Their operations are
governed by a trust deed which is administered
by a management company. Under the Managed
Investments Act 1997, the management company
has become the single responsible entity for both
investment strategy and custodial arrangements;
the latter previously had been the responsibility
of a trustee. These trusts allow their unit holders
to dispose of their units relatively quickly. They
may sell them back to the manager if the trust is
unlisted, or sell them on the Australian Stock
Exchange if the trust is listed. Public unit trusts
are categorised according to the main types of
assets in the pool; for example, property or
equity. Only those which invest primarily in
financial assets—mortgages, fixed interest,
futures or equity securities—are included here.
Wholesale trusts are investment funds that are
only open to institutional investors—life
insurance corporations, superannuation funds,
retail trusts, corporate clients, high net worth
individuals—due to high entry levels
(e.g. $500,000 or above). They may issue a
prospectus, but more commonly issue an
information memorandum. Only those which
invest in financial assets are included here.
Securitisers issue debt securities which are
backed by specific assets. The most common
assets bought by securitisation trusts/companies
are residential mortgages. These mortgages are
originated by financial institutions such as banks
and building societies or specialist mortgage
managers. Other assets can also be used to back
these securities, such as credit card receivables
and financial leases. Securitisers generally pool
the assets and use the income on them to pay
interest to the holders of the asset-backed
securities.
Investment companies are similar to equity trusts
in that they invest in the shares of other
companies. However, investors in investment
companies hold share assets, not unit assets.
Cooperative housing societies are similar to
permanent building societies. In the past they
were wound up after a set period, but now they
too are continuing bodies. They raise money
through loans from members (rather than
deposits) and provide finance to members in the
form of housing loans. Over recent years many
cooperative housing societies have originated
mortgages on behalf of securitisers.
Corporations registered in Category J of the
Financial Corporations Act 1974 are classified to
this sector because their liabilities are not
included in the Reserve Bank’s definition of
broad money.
Fund managers, insurance brokers and arrangers
of hedging instruments are classified as financial
auxiliaries as they engage primarily in activities
closely related to financial intermediation, but
they themselves do not perform an
intermediation role. Auxiliaries primarily act as
agents for their clients (usually other financial
entities) on a fee for service basis, and as such the
financial asset remains on the balance sheet of
the client, not the auxiliary. However, a small
portion of the activities of auxiliaries is brought
to account on their own balance sheet, and these
amounts are included in table 26.11.