ASIC takes action against Mellon

The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from Mellon Nominees over allegedly misleading and deceptive statements relating to the NSP Buck Eligible Rollover Fund.

ASIC says it acted in relation to statements associated with the fund, now known as the Mellon Eligible Rollover Fund following Mellon acquiring NSP Buck in 2002, that there were “nil” or “0.00” administration fees associated with the operation of the fund.

“ASIC has accepted an enforceable undertaking from Mellon Nominees Limited, formerly known as National Custodian, (Mellon) in relation to a claim made in the 2002 annual benefit statements sent to all members that administration fees for the year ending 30 June 2002 were 'nil' or '$0.00',” the regulator says.

ASIC says it was concerned that the statement made by the fund was "misleading and deceptive, because it gave members the impression there were absolutely no fees connected with the operation of the fund".

"In fact, trustee and administration charges of 1.6 per cent per annum had been deducted prior to the calculation of member's benefits for that year," ASIC says.

It says that although information about the trustee and administration charges of 1.6 per cent per annum were shown in an annual report accompanying the annual benefit statement, ASIC was concerned that the information contained in the annual benefit statement was not appropriately qualified or cross-referenced to information in the Annual Report.

As a result of ASIC's concerns, Mellon Nominees has given an undertaking that:

* Mellon will not make any statement to the effect that administration fees applicable to the fund are '$0.00' or 'nil' or any similar statement in the future;

* for the next five years, Mellon will specifically review all member statements to ensure that they contain no misstatements; and

* Mellon will issue a corrective statement to all fund members within 30 days.