ASIC has cancelled the Australian Financial Services (AFS) licence of Epic Property Investments Ltd (Epic), effective 31 May 2022.
Epic operates the following registered managed investment schemes:
- Epic Diversified Property Fund ARSN 099 566 202; and
- Epic Property Investment Fund ARSN 099 566 211 (the Schemes).
ASIC took this action because Epic has not held professional indemnity insurance since 21 April 2021. Epic was unsuccessful in its attempts to obtain the required insurance cover. As a result, ASIC considered that Epic has failed to comply with its obligations on an ongoing basis and was not providing retail clients with consumer protections required under the regulatory regime for AFS licensees.
Under the Corporations Act 2001, AFS licensees must have arrangements in place for compensating retail clients for losses they suffer as a result of a breach of obligations by the licensee or its representatives. These arrangements must generally include professional indemnity insurance cover that is adequate and takes into account the nature of the licensee’s business and potential liability for compensation claims.
Under the terms of the cancellation, Epic can continue to operate under its AFS licence on a limited basis until 31 December 2022, but only for the purposes of:
- providing financial services that are reasonably necessary for, or incidental to, the winding up of the Schemes; and
- ensuring that members and former members of the Schemes continue to have access to an external dispute resolution scheme.
These conditions have been put in place so that the cancellation does not adversely affect past or current members.
Epic Property Investments Ltd has held AFS licence 239011 since 26 February 2004.
Epic has the right to seek a review of ASIC's decision from the Administrative Appeals Tribunal.