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Thursday 6 November 2014

14-292MR Trident Investment Management Pty Ltd pays $10,200 penalty for misleading statements

Trident Investment Management Pty Ltd (Trident), the Australian financial services representative for Australian Mutual Holdings Limited (AMH), has paid $10,200 in penalties after ASIC issued an infringement notice for potentially misleading representations made in the promotion of its investment funds.

Trident is the investment manager of two registered managed investment schemes known as the Trident Global Growth Fund (Growth Fund), which launched in 2010, and the Trident Income Plus Fund (Income Fund), which launched in 2013.

In April 2014, ASIC issued two infringement notices to AMH, the responsible entity of the funds, relating to alleged misleading statements made in the funds' product disclosure statements (refer: 14-102MR).

ASIC's recent concerns related to Trident's promotion on its website that the Income Fund had achieved returns of 9.27% for the six-month period ending 30 June 2013. ASIC was concerned that the returns were false or misleading, as Trident failed to include the Income Fund's negative capital growth. This meant that the actual returns were significantly lower than 9.27%.

Trident removed the statements from its website in response to ASIC's concerns.

ASIC Commissioner Greg Tanzer said, 'Financial services providers need to be careful when using past performance information in their promotion material.

'It is important that consumers are in a position where they can understand and compare financial products. This also ensures fair competition within the industry.'

The payment of an infringement notice is not an admission of a contravention of the Australian Securities and Investment Commission Act 2001 consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

Download the infringement notice

Background

ASIC's Regulatory Guide 53 The use of past performance in promotional material (RG 53) provides guidance to the financial services industry on the use of past performance in promotional material.  Providers must ensure that they:

  • do not include imbalanced information (e.g. by highlighting potential benefits without explaining increased risks)
  • do not use inappropriately short or irrelevant investments periods
  • do not use out of date figures, and
  • draw attention to the fact that past performance may not be repeated.
Last updated: 06/11/2014 12:00