ASIC makes interim order against property loans fund
The Australian Securities and Investments Commission (ASIC) has made an interim stop order to prevent offer or distribution of the Westlawn Income fund.
This was because of a non-compliant target market determination (TMD) and would stop Westlawn Financial Services from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investment in the fund for 21 days unless revoked earlier.
The fund consisted of a portfolio of secured and unsecured loans, credit, leases and other fixed-interest financial assets, which ASIC considered to be high-risk. The fund was invested in five property development loans in NSW.
However, its TMD included investors:
- with a tolerance for a moderate level of risk with respect to their investment;
- needing liquidity or needing to make withdrawals during the investment term;
- seeking to have their capital invested for a minimum period of two years;
- seeking regular monthly income distributions.
ASIC felt these investors were unsuitable for the fund and the TMD did not meet the appropriateness requirements under the design and distribution obligations as they were not specific enough to ensure the fund was distributed to its target market.
ASIC said it expected Westlawn to consider the concerns raised about the TMD and take immediate steps to ensure compliance. It would consider making a final order if its concerns are not addressed in a timely manner.
Westlawn would have an opportunity to make submissions before a decision was made about a final stop order.
AUTHOR
Laura Dew
Recommended for you
Former RBA governor Philip Lowe has been appointed to the board of Barrenjoey as an independent non-executive director, six months after his first post-RBA move.
The board of Platinum Asset Management has reached a “unanimous conclusion” regarding a proposal from Regal Partners to acquire the company.
The monthly CPI inflation indicator fell to its lowest level since 2021 in August, showing the effect of the government's cost of living measures.
Australian Ethical has completed its acquisition of sustainable fixed income manager Altius Asset Management from Australian Unity.
