Five managed funds targeted by ASIC
The Australian Securities and Investments Commission (ASIC) has pinpointed five managed funds that need to improve their marketing oversight.
The corporate regulator’s ongoing surveillance of managed funds had raised additional concerns that some responsible entities weren’t doing enough to ensure their funds were appropriately marketed to investors.
In a statement on Wednesday, ASIC said it had identified concerns with the marketing of five funds and the oversight of this marketing by four responsible entities during its ongoing surveillance into the marketing of fund performance and risk. Together the funds in question had approximately $705 million in assets under management as at October 2022.
The marketing concerns ASIC identified varied across the funds. But, overall, ASIC was concerned that the representations made were not consistent with long-standing regulatory guidance that projected fund performance must be reasonable and include prominent and proximate qualification or warnings.
ASIC also flagged that promotion of fund benefits requires prominent and proximate balancing risk disclosure; that comparisons of funds with other products must be appropriate and reasonable; and that recommendations should be attributed and testimonials should be appropriate and reasonable. It noted that it wasn't convinced the funds in question adhered to these rules.
The regulator, however, stressed that as at the date of its media release, neither it nor a court had made any findings that any of these responsible entities, or any persons or entities associated with these funds are in breach of the law.
ASIC also underlined that the entities had not made any admissions of guilt or liability, and that all the responsible entities voluntarily amended their marketing materials and practices. Moreover, “they also agreed to amend their compliance plans to enhance their approval and ongoing supervision of fund marketing”.
Commenting on the findings of ASIC’s surveillance, ASIC deputy chair, Karen Chester, said: “We expect responsible entities to meaningfully supervise their funds management business.”
“As managed fund gatekeepers, they need to monitor, supervise and ultimately approve the fund’s marketing to investors to ensure that it is accurate and reliable.”
The five funds were:
This article previously appeared on Money Management's sister publication ifa.
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