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.
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.