Proof of how deep ASIC is digging on fund manager claims

Mike Taylor

Managing Editor and Publisher

20 June 2025

The Australian Securities and Investments Commission’s (ASIC’s) imposition of a penalty on Equity Trustees (EQT) over making misleading statements as a Responsible Entity for a green bond fund has reinforced just how deeply the regulator is digging.

The infringement notices published by ASIC with respect to EQT’s claims around the Artesian Green and Sustainable Bond Fund reveal that the regulator conducted an audit of the web site covering the fund and compared the claims made against the reality of the actual investments.

What ASIC discovered was that far from investing in “a diversified portfolio of liquid, predominately investment grade fixed and floating rate green and corporate bonds” and investing “in green and sustainable corporate bonds issued by global companies” the fund was actually investing in government bonds and superannuation bonds.

ASIC noted that Equity Trustees Limited had hosted a public website relating to the Fund and that the Website contained the following statements during the Relevant Period:

1. ‘FUND The Artesian Green & Sustainable Bond Fund will invest in a diversified portfolio of liquid, investment grade fixed and floating rate green, sustainable and social corporate bonds. The Fund invests in Australasian and global issuers.’
2. ‘STRATEGY The Fund will invest in green, sustainable and social corporate bonds issued by global companies.

The following is the result of the ASIC audit on the investment claims made.

The ASIC approach comes against the background of continuing financial adviser concern at the fact that managed investment schemes MISs are not encompassed in the funding arrangements for the compensation scheme of last resort (CSLR).

In providing background to the penalty imposed on EQT, ASIC noted that “Managed investment schemes are a common investment vehicle in Australia”.

“An estimated $2.7 trillion of assets is currently held in these investments. Of this amount, around $1.8 trillion in assets is held by schemes registered under the legislative framework set out in Chapter 5 of the Corporations Act. At the end of June 2022, there were 420 responsible entities operating a total of 3,656 registered schemes in Australia.”