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dc.contributor.authorDavis, K
dc.date.accessioned2021-01-06T00:25:25Z
dc.date.available2021-01-06T00:25:25Z
dc.date.issued2020-09-01
dc.identifier.citationDavis, K. (2020). Financial Product Design, Retail Investor Sophistication and Issuer Incentives: A Case Study. Australian Accounting Review, 30 (3), pp.206-211. https://doi.org/10.1111/auar.12266.
dc.identifier.issn1035-6908
dc.identifier.urihttp://hdl.handle.net/11343/258562
dc.description.abstractMany financial products and securities marketed to retail investors involve design features that can make it difficult to understand the risk and return characteristics involved. This paper examines one such security, Convertible Preference Step Up Units (CPUs), issued in Australia by the US Masters Residential Property Fund (URF) at the end of 2017. It argues that an apparently relatively simple design masks significant complexity which would make risk assessment and fair pricing well beyond the capabilities of retail investors. Despite that, analysis of the security design and disclosure documents suggests that it would not fall foul of the financial product banning powers recommended for the Australian Securities and Investment Commission by the 2014 Australian Financial System Inquiry and in draft legislation as at mid 2018. This highlights the difficulties for effective financial consumer protection resulting from the mismatch between financial literacy levels and financial product design.
dc.languageEnglish
dc.publisherWiley
dc.titleFinancial Product Design, Retail Investor Sophistication and Issuer Incentives: A Case Study
dc.typeJournal Article
dc.identifier.doi10.1111/auar.12266
melbourne.affiliation.departmentFinance
melbourne.source.titleAustralian Accounting Review
melbourne.source.volume30
melbourne.source.issue3
melbourne.source.pages206-211
melbourne.elementsid1349098
melbourne.internal.embargodate2022-09-01
melbourne.contributor.authorDavis, Kevin
dc.identifier.eissn1835-2561
melbourne.accessrightsThis item is embargoed and will be available on 2022-09-01


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