Stapled Securities: Australian Anomaly or Adaptable Innovation

Abstract

The issuing of stapled securities (such as a unit in a trust and a share in a company) which cannot be traded separately occurs relatively frequently in Australia but is not common elsewhere. This paper outlines the features and usage of stapled security structures and examines explanations for their popularity in Australia such as tax, behavioral finance, and governance aspects. It considers the use of such structures, and regulatory impediments, in other economies.

Keywords: stapled securities, financial innovation, taxation, REITs, infrastructure funds

JEL Classification: G32