ASIC warns REs to take responsibility
TheAustralian Securities and Investments Commission(ASIC) has issued a fresh warning to responsible entities (REs) of managed investment schemes that they must take full responsibility for their schemes if they are to comply with the Corporations Act.
The warning comes as ASIC orders a Western Australia-based RE to restructure seven schemes due to the relationship between the scheme manager and the RE.
According to ASIC, scheme members can appoint a manager for the scheme, but the law is breached if the manager effectively becomes responsible for operating the scheme.
“We were concerned that investors could have unknowingly diminished their rights and interests, by participating in the scheme in a way that breached the Corporations Act and in fact, absolved their responsible entity of any responsibility at all,” ASIC executive director Ian Johnston says.
In other actions taken to protect investors this week, ASIC has permanently banned Kevin Trezona, formerly a director and authorised representative of Investment Planners (Australia), from acting as a representative of a dealer or an investment adviser.
The findings leading to the ban covered Trezona’s failure to have a reasonable basis for investment recommendations, failure to disclose substantial benefits or advantages he would receive in connection with recommendations to clients about securities, making offers of securities requiring disclosure without lodging a disclosure document with ASIC and engaging in misleading or deceptive conduct.
In Queensland ASIC has secured undertakings from company directors Kevin and Kathleen Young and companies The Investor Club, Lisson, Self Help Investors Group and Club Loans in relation to two schemes, ‘Joint Venture Projects’ and ‘No Tenant? No Problem? Program’ ahead of an urgent trial on 10 February.
ASIC alleges that The Investors Club is in breach of the Corporations Act, and that the Youngs and their four companies had provided financial services to consumers without ever holding an Australian Financial Services License.
Recommended for you
The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered.
Rather than taking a controlling approach, the latest generation of overseas private equity deals is helping advice firms to achieve their growth ambitions, three commentators have said.
Private wealth firm Fitzpatricks Group has appointed a newly created head of product, who previously spent 20 years at CFS, to bolster its range of investment options.
The Financial Services and Credit Panel has made a written direction after advice regarding non-concessional contributions meant an individual was forced to withdraw over $330,000 from their super.
