This article is from the Australian Property Journal archive
INTERIM stop orders issued by the corporate watchdog for two funds operated by MPG Funds Management have been revoked, after both issued amended target market determinations (TMD).
The Australian Securities and Investments Commission (ASIC) issued the orders last month for the MPG Bulky Goods Retail Trust and the MPG Essential Services Property Trust that halted MPG from issuing interests in, giving a product disclosure statement for, or providing general advice to retail clients recommending investments in the Trusts.
In a statement, MPG said, “We are supportive of ASIC’s reviews and have worked collaboratively with them to reword our Target market Determinations to ensure they are “best practice” and meet ASIC’s stricter interpretation of the newly introduced Treasury Law Amendment (Design and Distribution Obligations and Product Intervention Powers) Laws.”
ASIC said last month made the interim orders “to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs”.
It said the trusts “have an investment term during which investors have no ongoing withdrawal rights and employ leverage, which increases the level of risk for investors.
“ASIC is concerned that MPG has not appropriately considered these features and risks in determining the target markets for the trusts because the TMDs include investors: with a tolerance for an undefined ‘medium risk’, wanting stable and regular income distributions; and needing liquidity or needing to make withdrawals during the investment term for the trusts,” ASIC said.
