The Australian Securities and Investment Commission (ASIC) recently published a submission into the collapse of forestry managed investment schemes between 2009 and 2012. Whilst the submission primarily focused on forestry schemes, it also provides insight to operators, promoters and distributors of managed investment schemes generally.
Key themes included:
The need for a compensation system
ASIC argues for the consideration of a ‘limited last resort” statutory compensation system to supplement professional indemnity insurance in an attempt to address what ASIC sees as a ‘growing’ problem of uncompensated loss within the financial services industry. ASIC’s second submission to the FSI indicates that this concern is primarily focused on the financial advice sector rather than the operation of managed investment schemes.
Obtaining an AFSL
ASIC continue to express con concern at the ease with which and Australian Financial Services Licence (AFSL) can be obtained and the limited ability for ASIC to cancel or suspend a AFSL once granted.
The submission can be read here.