ASIC grants relief for hardship withdrawals from frozen managed funds
The Australian Securities and Investments Commission (ASIC) has cleared the way for people facing hardship to make withdrawals from management funds.
The regulator said it had put in place new relief measures for operators of managed funds to facilitate withdrawals by members facing financial hardship during the COVID-19 pandemic.
ASIC said the conditional relief was available through a legislative instrument, which applied to all responsible entities (REs) of registered managed investment schemes that had become ‘frozen funds’.
Announcing the move, ASIC said the relief measures would ease some of the statutory restrictions on REs and improve access to investments by members who met specific hardship criteria.
ASIC previously granted hardship relief to REs of frozen funds on a case-by-case basis only.
Commenting, ASIC deputy chair, Karen Chester said that at times of extreme market volatility, responsible entities of some managed funds might need to suspend redemptions and freeze funds to protect the interests of the members as a whole.
“ASIC recognises that it may be the right thing for responsible entities to freeze their funds in such circumstances, and in doing so protect the interests of all members. But this can be especially problematic for some individual members experiencing financial hardship,” she said.
“The hardship relief will make it easier for responsible entities of frozen funds to enable withdrawals by investors suffering hardship. However, in doing so, responsible entities will still have to act in the best interests of members. We encourage responsible entities to consider whether the relief is appropriate for their particular fund.”
Recommended for you
The Compensation Scheme of Last Resort says it has received over 200 claims for compensation relating to personal financial advice since its inception and detailed the specific recurring issues being raised by claimants.
Two financial advisers have shared with Money Management why they opted to specialise in certain client niches when setting up their own business.
Insignia Financial has reached a major milestone in completing the separation of MLC Wealth from NAB, having acquired the firm back in 2021.
There could be changes ahead for how ASIC requires licensees to handle conflicts of interest as the corporate regulator announces it will be meeting key stakeholders next year to update guidance.
