ASIC defensive on Fincorp
The Australian Securities and Investments Commission (ASIC) has defended its handling of the Fincorp Group case, indicating that it has on numerous occasions warned the public about such high-yield debenture investments.
The regulator said that under the Corporations Act, the issuer and its advisers, not ASIC, had responsibility for preparation of accurate prospectuses.
While it is not required to vet prospectuses, ASIC pointed out that as part of its “market surveillance” it reviewed a percentage of them, which had included those issued by Fincorp.
According to an information statement issued by the regulator, “Since 2002, on six occasions ASIC forced Fincorp to improve the quality of its disclosure documents — including by court action”.
It also drew attention to an order ASIC issued in 2005 relating to withdrawal and correction of certain Fincorp advertisements.
Pointing out other actions it has taken in attempting to avert cases such as the Fincorp collapse, ASIC referred to its 2004 warning about the risks of debenture and other products offering higher than usual returns, its 2005 report on high-yield debentures and last year’s three-way test to help investors assess fixed interest investments.
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