Mulino canvasses MIS capital holdings changes

Managed Investment Schemes (MIS) may face new rules around the adequacy of their capital holdings with the Minister for Financial Services, Daniel Mulino flagging he has raised the issue as part of developments around the collapse of the Shield and First Guardian funds.

Mulino has confirmed he has written to ASIC “in relation to whether or not [the] capital holding requirements of MISs are sufficient”.

As well, Mulino has favourably referenced the actions of Macquarie Investment Management in terms of how he believes Platforms should handle remediation issues.

Under Parliamentary questioning last week, Mulino was at pains to defend the pace at which the Government had moved to respond to the investor losses which had flowed from the fund collapses but made it clear that the Government would not be moving ahead of the substantial findings of the Australian Securities and Investments Commission (ASIC).

He also made clear that he had written to the Australian Prudential Regulation Authority (APRA) with respect to the role of investment platforms in the matter.

Mulino said the focus of ASIC, “the independent regulator, over recent months has been to protect investor funds, and it has undertaken a range of actions to do so.

“It has a range of actions already underway in court. This includes actions in relation to financial advisers involved in these collapses. It also involves actions against individuals involved in the managed investment schemes. Importantly, there were also significant actions in relation to the platforms.

“I welcome the fact that recently there was an agreement reached between Macquarie and ASIC which saw over $300 million returned to investors. So, a significant proportion of the investors in the Shield MIS will see a full return of their capital. But I do acknowledge that there is more work to be done, and I continue to work with ASIC and with other regulators in relation to the immediate priority of protecting investor interests,” the minister said.

Mulino said he had he had acted promptly to deal with matters and had written to APRA to receive briefings from the regulator in relation to whether or not capital holding requirements of MISs are sufficient.

“Having been notified of these matters, I have asked my department to provide me with briefings in relation to how we might strengthen regulatory arrangements going forward,” the minister said.