Approved Syndicate Promoters

The Australian Securities and Investments Commission (ASIC) consider a horse racing scheme to be a managed investment scheme (MIS).
What is a Horse Racing scheme?

A horse racing scheme will generally be considered a managed investment scheme (MIS) by the Australian Securities and Investments Commission (ASIC). Usually 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.

Given the complex nature between the thoroughbred and financial services industries, ASIC has appointed Racing Victoria as Lead Regulator of horse racing schemes in Victoria for offers which qualify for “conditional relief” under the ASIC Corporations (Horse Schemes) Instrument 2016/790.

If you are considering to publicly promote shares in a racehorse, you should familiarise yourself with the following information: 

As Lead Regulator, Racing Victoria must approve any entity who intends to offer shares in a racehorse prior to such offers being published. All approved entities are registered on Racing Victoria’s Register of Promoters.
Registered Promoter Application Process
1. The entity must apply directly to ASIC for an AFSL or approach an AFSL holder (on Racing Victoria’s Register of Promoters) to seek appointment as an Authorised Representative.

Your best resource on how to apply for an AFSL is by visiting ASIC’s website.

2. Following the granting of an AFSL by ASIC, the entity should then make an application to Racing Victoria by completing the following, relevant form:
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 racehorses in Victoria. However, prior to promoting any horse shares, Racing Victoria must also approve a Product Disclosure Statement (PDS).
What is a PDS?

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 aim of a PDS is to 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.

To assist promoter’s a pro forma PDS is available here. The pro-forma PDS outlines the relevant content requirements under the Instrument and ASIC RG 91.

 A PDS is only valid if it is approved by Racing Victoria prior to any offer of an interest in a racehorse is made. An application for approval by Racing Victoria can be made by submitting a PDS and completing the following application form and Statutory Declaration:

Please note - that for your application to be reviewed and approved by Racing Victoria, all supporting documentation should be provided at the time of lodgement.

Promoter’s should also consider the importance of verifying the identity of owners acquiring an interest, in a horse racing scheme. A pro-forma Customer Identification Form can be accessed here.