Ausbil Investment Management Limited (Ausbil) in its capacity as responsible entity of the Ausbil Investment Trusts – Australian Emerging Leaders Fund (Fund) is in the process of remediating a fee error to affected investors. An overcharging of fees of approximately $18m occurred between December 2004 and January 2014 due to an inconsistency between the fees outlined in the Fund's Product Disclosure Statement and the fees permitted under the Fund's constitution.

Ausbil notified ASIC as soon as it was aware of the breach, and following those discussions, advised investors it would undertake remedial action. ASIC has been working with Ausbil to resolve this matter in the interest of investors.

Ausbil appointed KPMG as an independent advisor to review the compensation methodology and to assess the controls and processes around its compensation arrangements.

Ausbil has completed the payment of compensation to direct investors and is currently in the process of assisting platforms to make payment to their underlying clients impacted by the fee error. The timing of these payments will differ by platform. The compensation, it is anticipated will return investors to the position they would have been in had the error not occurred.

'ASIC welcomes Ausbil's identification and reporting of the overcharging issue, and action to compensate. We expect nothing less of entities who discover issues like this with their systems that are detrimental to their clients,' ASIC Commissioner Greg Tanzer said.

'ASIC will work with entities who report issues to us to ensure consumers are compensated in a timely, effective way'.

ASIC acknowledges the cooperative approach taken by Ausbil in relation to this matter.

ASIC will continue to monitor the compensation process. 

Any investor with queries or concerns about the fee error should review project updates issued by the platform they invested through, check the Ausbil website www.ausbil.com.au or contact Ausbil by telephone on 02 9259 0200 or e-mail to contactus@ausbil.com.au

Background

ASIC closely monitors issues relating to the overcharging of investors. In such cases Australian financial services licensees are obliged to breach report to ASIC and fully compensate investors in a timely manner. ASIC's recent work with licensees has resulted in more than $60 million in compensation being refunded to investors. Other recent outcomes involving compensation to investors include:

• NAB Wealth to refund customers after review of system error. (refer: 15-194MR)
• Macquarie Investment Management refunds clients after review of system errors. (refer: 15-150MR)
• BT to refund customers after review of fees disclosed and charged. (refer: 13-159MR)
• BoQ to refund customers after system error. (refer: 13-070MR)
• ASIC works with the Rock Building Society to correct charging errors. (refer: 10-267AD)