Managers face billion dollar tempest
Nearly 60Australian fund managers have been set a July 18 deadline by the New Zealand Securities Commission to investigate possible breaches of regulations in filing documents for Australian Registered Managed Investment Schemes (ARMIS) in the country.
Any breach will void the fund or product in question and result in full repayment of funds to clients, plus 10 per cent interest a year from the date of subscription — a figure that could run into the billions.
The Commission has written to various fund managers afterBT Funds Managementin New Zealand revealed it may have breached statutory filing legislation under The Securities Act 1978 (NZ).
Australian managers have two compliance options for offering products in New Zealand. The first is a more expensive option involving the issue of a separate prospectus and appointment of a statutory supervisor. The second involves meeting the conditions of an exemption notice under The Securities Act 1978 and requires the filing of various documentation with the New Zealand Registrar of Companies.
The requisite paperwork includes providing a copy of the relevant Australian prospectus, evidence of the responsible entity’s Australian securities licence, the constitution of the product, evidence it is registered in Australia, and the compliance plan for the scheme to the registrar.
According to New Zealand Securities Commission associate counsel Kathryn Rogers, a letter was sent to investment managers on June 23 giving them four weeks to respond.
The commission wrote to those managers that are obliged to report to it each year as part of the exemption notice for ARMIS, as these will be the managers if any that are in breach, Rogers says.
Money Managementcontacted a number of fund managers, however, none would comment beyond the fact it was a matter being looked into by their legal and compliance officers.
A hearing relating to BT NZ’s alleged breaches is scheduled for the Wellington High Court on July 27.
“[However] it may not actually be called on that day because it’s been scheduled for a master of the High Court but it may be rescheduled for a judge,” says court appointed legal firm Lowndes Jordan partner, Graham Jordan.
“The initial proceedings are to determine what classes of investors there are and whether there are different groups with different interests.”
On the likely time frame for concluding proceedings on the matter, Jordan adds, “it’s a long way away, unfortunately”.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
