NZ managers batten down hatches over documents
A turfwar between fund managers in New Zealand has triggered intervention from the Securities Commission.
In New Zealand, fund managers must produce an Investment Statement and a registered prospectus for all their investments.
The Investment Statement is a short form prospectus which generally has bland answers to a set of legally specified questions. The prospectus has much more detail about the funds, including accounts and tax details.
Under law, a manager must give someone either document if they ask. Generally, prospectuses are only ever asked for by advisers and competing fund managers.
The problem is that a number of firms with innovative funds have been refusing to give the documents to their competitors.
The Securities Commission says managers who refuse to give out prospectuses when requested are breaking the law.
Currently, the penalty under the Securities Act is a fine of up to NZ$10,000. However, that figure may rise with legislation currently going through the New Zealand Parliament.
Commission executive chairman Jane Diplock says it has had a number of complaints about prospectuses. Diplock says competitors are members of the public and must be given the information they ask for.
“What we’re doing here is warning companies that they should have those documents absolutely ready if someone puts in a request,” she says.
“This is really a flag to the industry that if they don’t provide these documents, we will take action.”
Recommended for you
Clime’s disposal of advice licensee Madison “needed to happen yesterday”, managing director Michael Baragwanath has told Money Management, as he concludes a severe cost-out period at the business.
As Viola Private Wealth continues on its growth trajectory, the wealth management firm has appointed a seasoned investment professional to be its first chief investment officer.
Financial advisers who wish to implement artificial intelligence in their practices need to undergo a change in their mindset as to how they use technology.
With United Global Capital expected to constitute a substantial portion of CSLR compensation in FY25–26, what has AFCA ruled in its determinations on the company so far?
