Horse Racing Scheme
A horse racing scheme will generally be considered a managed investment scheme (MIS) by the Australian Securities and Investments Commission (ASIC). A horse racing scheme is when a promoter offers to sell or invites people to acquire an interest in an arrangement under which, a group of people agree to contribute money, in return for a share of prize money won by a racehorse.
Running an MIS, in accordance with the Corporations Act 2001 (Cth), can be a costly exercise as there is a requirement to hold an Australian Financial Services Licence (AFSL) prior to any offer of horse shares being made, along with several other compliance requirements.
ASIC has appointed Harness Racing Victoria as Lead Regulator of standardbred horse racing schemes in Victoria.
Harness Racing Victoria must approve any entity who intends to offer shares in a racehorse prior to such offers being published.
Registered Promoter Application Process
1. The entity must apply directly to ASIC for an AFSL or approach an AFSL holder (on Harness Racing Victoria’s Register of Promoters) to seek appointment as an Authorised Representative.
2. Following the granting of an AFSL by ASIC, the entity should then make an application to Harness Racing Victoria by completing the following, relevant forms:
- Application to be placed on HRV’s “Register of Promoters” as an Australian Financial Services Licensee
- Application by and AFS Licensee to appoint an Authorised Representative
3. The applicant will then be required to attend an interview, in-person.
4. If the applicant is approved, they are eligible to promote shares in standardbred racehorses in Victoria. However, prior to promoting any horse shares, Harness Racing Victoria must also approve a Product Disclosure Statement (PDS).
Product Disclosure Statement
A PDS is a disclosure document used in the financial services industry, which is provided to a potential client, prior to them making an investment. The PDS should disclose all the relevant information, such as the costs entailed in the scheme and the risks and benefits of investing, to ensure the potential client can make a fully informed decision prior to acquiring an interest.
A pro forma PDS is available below:
A PDS is only valid if it is approved by Harness Racing Victoria prior to any offer of an interest in a standardbred racehorse is made. An application for approval by Harness Racing Victoria can be made by submitting a PDS and completing the following Statutory Declaration:
Please note – that for your application to be reviewed and approved by Harness Racing Victoria, all supporting documentation should be provided at the time of lodgement.
*Note: Processing of applications will incur an administration fee to be advised to cover the expense of reviewing all submitted documentation.