Managers fail to meet compliance deadline
Lessthan half of the 60 Australian-based fund managers requested to submit information to the New Zealand Securities Commission — relating to possible breaches in filing Australian Registered Managed Investment Scheme (ARMIS) documents in the country — complied with last Friday’s deadline for submission.
About a third of managers have had no correspondence with the commission whatsoever, despite the elapsed deadline, while some managers have requested an extension in order to comply.
“We’ll follow up in the first instance to confirm that managers have received the paperwork, though we’re undecided at the moment as to how we will proceed after that,” says the commission’s associate counsel Kathryn Rogers.
The Australian managers, contacted by the commission in late June, were encouraged to disclose if they had breached statutory filing legislation under The Securities Act 1978 (NZ) — an issue brought to light afterBT Funds Management’s revelation it may have failed in its adherence with the Act.
A breach will void the fund or product in question and result in full repayment of funds to clients, plus 10 per cent interest a year from the date of subscription.
The commission’s general counsel, Liam Mason, says the request for information was a fact finding mission rather than a strict penalty-inducing deadline, and was more an exercise for fund managers to check themselves if there was a problem.
“I guess it’s more practical for the managers themselves to assess if the problem affects them,” he says.
From the submissions received, Mason says it appears the problem, initially feared to be a widespread phenomenon, may turn out to be less severe.
However, with the majority of managers yet to respond, the issue may still become far reaching.
At present, only UK-based Edinburgh Funds Management along with BT have publicly acknowledged compliance problems.
Rogers says the commission is likely to await the outcome of a BT court-case, which is scheduled for July 29 in the Wellington High Court, before committing itself to a course of action on the matter.
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