After an investigation by ASIC, Tiy Loy Chinese Community Incorporated and Tiy Loy & Co Ltd have significantly improved their consumer protections for members of the Tiy Loy Charitable Scheme (together, Tiy Loy). 

Tiy Loy will now provide its members with information about itself, the terms and conditions of its members' deposits, handle deposits in appropriate ways and comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Tiy Loy provides a range of services to its members, who are people from, or descendants of people from the Chinese counties of Gaoyao and Gaoming, now living in Australia. In addition to deposit-taking on behalf of its members to cover, for example, expenses associated with funerals, other life celebrations and any specific needs that arise in a depositor's later years, Tiy Loy also provides assistance to new migrants arriving in Australia, a community meeting place, assistance to members with translation and interpreting and organises functions.

ASIC was concerned that Tiy Loy was taking deposits from its members and  consequently issuing debentures, a financial product. Debenture issuers are required to hold an Australian financial services (AFS) licence, have compliance systems in place and comply with the disclosure regime under the Corporations Act. Tiy Loy had none of these things.  Consequently, ASIC was concerned that Tiy Loy was not complying with the law and that its members were unaware of the risks of depositing funds with Tiy Loy.

The Corporations Act exempts charities from the full licensing and disclosure regime if they comply with ASIC Class Order [02/184] Charitable investment schemes – fundraising.

ASIC raised its concerns with Tiy Loy and Tiy Loy agreed to comply with the class order and some additional requirements. Tiy Loy has now registered its identification statement with ASIC, as required under the class order, and is permitted to continue taking deposits provided it complies with the conditions set out in the identification statement. 

ASIC Commissioner Greg Tanzer said ASIC's intervention ensured the depositors, many of whom were elderly and unfamiliar with the legal requirements, would now be afforded certain protections under the law, with minimal disruption to the operation of Tiy Loy's activities.

'It is vital that issuers of debentures, including charitable schemes, comply with their obligations under the Corporations Act for the benefit of members and to engender broader confidence in the operation of the schemes,' Mr Tanzer said.