ASIC raises issues with Macquarie over forecasts
Macquarie’sprivate equity arm is to raise its compliance standards after giving an enforceable undertaking to theAustralian Securities and Investments Commission (ASIC)in relation to ASIC policy on future financial projections.
The undertakings were given by Macquarie Investment Management Limited (MIML), which is the responsible entity of Macquarie Private Equity Trust II (MPET II) - a trust enabling retail investors to invest in private equity investments and to which the matter relates.
When MPET II was launched in April 2002 statements by the group asserted that the fund had target returns of 14 per cent after fees and taxes. However, there was no equivalent statement of target returns in the trust's prospectus.
ASIC was concerned that investors could have interpreted the term 'target return' as a financial forecast.
MIML has undertaken to not use statements about target returns in promotional materials unless the same statements are included in the prospectus, and apply guidelines set out in ASIC Policy Statement 170 to all promotional material.
It will also ensure its representatives who talk to the media receive training on the relevant ASIC Policy Statement.
ASIC was primarily concerned that the publicity may have diluted the effect of the legislative provisions and its policy in dealing with prospectuses and financial forecasts.
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