Absolute Capital resolves stop order issue

TheAustralian Securities and Investments Commission(ASIC) has lifted the interim stop order placed on Absolute Capital’s Yield Strategies Fund.

Absolute Capital lodged a supplementary prospectus with ASIC and the additional information was enough for the regulator to lift the stop order. This enabled the group to resume accepting applications for the fund.

The supplementary prospectus, to be read in conjunction with the replacement prospectus, provides extra detail into the expected risk and returns of the fund as required by ASIC.

The chief areas of concern for the regulator were the clarification of the meaning and interpretation of charts in the prospectus, the clarification of the relationship Absolute Capital has with a related company Absolute Capital Markets, and more details regarding the disclosure of valuation of assets.

Group managing director of Absolute Capital Deon Joubert says he was pleased the matter was resolved in a matter of days after the initial placement of the stop order.

“ASIC asked that we cover more information for retail investors given the strategies we take. The Yield Strategies Fund is unique in Australia and the complex underlying investments and strategies make disclosure in plain English challenging,” he says.

“However, the supplementary prospectus aims to increase understanding among investors and make these types of alternative investments more accessible.”

Joubert says the stop order did not impact existing investors in the fund, which remains solid in terms of structure and its investment strategy, and he is not aware of any issues which would further impact on investors in the fund.