ASIC invokes interim stop orders on two funds
The Australian Securities and Investments Commission (ASIC) has made interim stop orders on two property funds after failings with their target market determination (TMD) statements.
These prevented the responsible entities of the funds from issuing interest in, giving a product disclosure statement for or providing general advice to retail clients recommending investment in the funds under the existing TMD.
The two funds were the Australian Residential Property (ARP) Fund and Private Property Trust No.20.
The ARP Fund solely invested in a portfolio of Australian residential property assets, borrowed money to support its investment activities, engaged in property development activities and was relatively low in liquidity.
The Trust invested in a concentrated portfolio of commercial property assets and borrowed money to support its investment activities. Investors in the Trust were unable to withdraw their money from the Trust in the first seven years of their investment.
ASIC said it made the order to protect retail investors from potentially investing in a fund that may not be suitable for their financial objectives, situation or needs and that the responsible entities should take immediate steps to ensure compliance.
The orders were valid for 21 days and if ASIC’s concerns were not addressed, final stop orders would be placed on the funds. The responsible entities would have an opportunity to make submissions to ASIC before any final stop orders were made.
AUTHOR
Laura Dew
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