Managers suspend funds in wake of attack

AMPandMacquariehave suspended business within certain unit trusts amid warnings from theInvestment and Financial Services Association(IFSA) to investors that a number of fund managers will suspend business due to the terrorist attacks in the United States.

So far AMP and Macquarie have released statements indicating that while the attacks in the US have not damaged their operations, operations in certain unit trusts would be suspended.

According to the AMP’s statement released to the ASX earlier, the company has frozen unit pricing in all products which are linked to international capital markets. The suspension would be lifted after AMP felt it was satisfied those markets were stable and trading normally. It says this would protect investors from “unwarranted impact in the short term.”

Macquarie has also suspended operations in most unit trusts with the exception of its Cash Management Trust, Treasury Fund, ADF Superannuation Fund and Gilt Edge Access Account.

It has stated that the halt was to protect the interests of unitholders and was the result of the closure of important international markets which has caused a probable lack of liquidity in Australian markets.

IFSA’s warning was in keeping with its standard policy, titled the Valuation of Scheme Assets. The policy says that at the time of valuation, if assets and liabilities cannot be determined and processing of transactions would have affected investors then a scheme operator should suspend operations until assets and liabilities can be determined."

IFSA chief executive Lynn Ralph says given the circumstance in the US, IFSA was aware that some companies would be suspending purchases and redemptions of the units in trusts impacted by the failure of certain US markets to open.