Regulators move jointly on Astarra funds

Australia’s two financial services regulators have moved in tandem against a mainstream superannuation and funds management entity — Trio Capital Limited, which formerly traded as Astarra Capital Limited — and suspended it as trustee of four superannuation funds and a pooled superannuation trust.

In what represented an almost unprecedented move, the Australian Securities and Investments Commission (ASIC) and the Australian prudential Regulation Authority (APRA) announced they had suspended Trio and appointed an acting trustee as a result of what were described as “numerous breaches of Trio Capital Limited’s licence conditions” and the failure of the company to satisfy APRA’s concerns regarding the valuation of superannuation assets.

The four main superannuation funds affected by the regulatory action were Astarra Superannuation Plan, Astarra Personal Pension Plan, My Retirement Plan and the Employers Federation of NSW Superannuation Plan.

The funds have approximately 10,000 members and assets as at September of around $300 million. The superannuation funds have significant investments in the Astarra Strategic Fund — a Trio Capital Limited managed investment Scheme.

The regulatory announcement said the Astarra Strategic Fund financial statements for the year ended June 30 showed total assets of around $118 million.

ASIC has suspended the Australian Financial Services Licence held by Trio Capital under which it acts as responsible entity for 24 registered managed investment schemes and Trio Capital itself has been placed into external administration.

The regulatory announcement said ASIC had begun an investigation into Astarra Strategic Fund in early October and on October 21 issued a stop order of the Product Disclosure Statements for Astarra Superannuation Plan, Astarra Personal Pension Plan, My Retirement Plan and three related sub-funds of My Retirement Plan.

It said ASIC had also issued a stop order on October 16 in relation to the Product Disclosure Statements of Astarra Conservative Fund, Astarra Balanced Fund, Astarra Growth Fund, Astarra Strategic Fund, Astarra Covered Call Fund and Astarra International Covered Call Fund.

The statement said APRA issued directions freezing the assets of the four main superannuation funds on October 21 for one month, which was subsequently extended until February next year.