The Australian Business Securitisation Fund (ABSF) will invest up to $2 billion in warehousing and the securitisation market, providing significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms. It will be administered by the Australian Office of Financial Management (AOFM).
Through the ABSF, AOFM will:
- fund new and existing warehouse facilities for SME loans alongside the private sector; and
- buy and hold securitised SME loans in order to support segments of the market where there are identifiable gaps.
The Government announced the ABSF on 14 November 2018.
On 13 February 2019, the Government introduced legislation to implement the fund. The Government has also released indicative drafts of the Rules and Investment Mandate, which will be finalised following passage of the Bill.
- Bill – Explanatory Memorandum
- Indicative draft of Rules
- Indicative draft of Rules – Explanatory Statement
- Indicative draft of Investment Mandate Directions
- Indicative draft of Investment Mandate Directions – Explanatory Statement
Operation of the fund
The AOFM will make targeted investments in securities issued by warehouses, alongside private sector investors. These warehouses provide funding to smaller banks and non-bank lenders for loans extended to small businesses.
- Australian Business Securitisation Fund Exposure Draft Submissions close 16 January 2019