ASIC hits La Trobe with interim stop order
The Australian Securities and Investments Commission (ASIC) has made an interim stop order against the La Trobe US Private Credit Fund.
The regulator announced the stop order stating that it was aimed to protect consumers and retail investors from acquiring a product that might not be suitable for their financial objectives, situation and needs.
It said ASIC’s action follows concerns the Target Market Determination (TMD) for the Fund:
- suggests an inappropriate level of portfolio allocation given the risks of the Fund, and
- does not adequately specify an investment timeframe for retail clients.
The interim order prevents La Trobe from dealing in interests giving a product disclosure statement for, or providing general financial product advice to, retail clients recommending an investment in the Fund. The order is valid for 21 days unless revoked earlier.
This stop order referral arose from ASIC’s retail private credit surveillance which focused on fund transparency, governance, valuation practices, management of conflicts of interest and fair treatment of investors, conducted as part of its response to Australia’s evolving capital markets.
ASIC also announced similar action with respect to the La Trobe Australian Credit Fund.
Didn’t ASIC sign off on the PDS in the first place
No, ASIC merely accepts the PDS as a document, for the record. It does NOT accept it as true or agree with it and certainly does not endorse anything… What is it with people who want “mummy” to look after them, but also caste mummy as the villain if/when things go wrong. Private credit is the next big bust coming our way and anyone who bothers looking carefully will know that. But few do. They simply want to be able to sell stuff without having to accept responsibility for their ‘advice’ about it. After 43 years in the Money Business I tired of being associated with those who behave so badly. I recall when Estate Mortgages came around – in the mid 1980s – spruiking their wares as “smarter than the rest; more willing to do deals others weren’t willing/able to do” and I said to myself (and all my clients) at the time: “These guys are charlatans and anyone who touches their products (mortgage trusts; i.e. private debt) has rocks in their heads”. They were paying about 18% when the best you could get elsewhere was about 15%pa and many got sucked in. The fact they paid 1% commission to ‘advisers’ who sold them didn’t do any harm to sales, either. Same goes now. Stop relying on ASIC – the under-resourced cop on the beat – and start relying on your OWN investigative skills and intelligence!