Invest
ASIC cracks down on sophisticated investor certificates
The corporate regulator says some accountants may be putting retail investors in harm’s way by inappropriately supplying them with ‘sophisticated investor’ certificates.
ASIC cracks down on sophisticated investor certificates
The corporate regulator says some accountants may be putting retail investors in harm’s way by inappropriately supplying them with ‘sophisticated investor’ certificates.
Under current regulations, retail investors – ordinary Australians choosing to invest their money – are only allowed to invest in a company where sufficient information is provided to them, in the form of a product disclosure statement or other regulated disclosure document.
However, investors with a gross income of at least $250,000 in the previous two years and have net assets of a minimum $2.5 million can be considered ‘sophisticated investors’ under the Corporations Act.
Investors who meet these requirements can receive a certificate from an accountant that permits them to invest in products that do not have the regulated disclosure documents required for retail investors as they are deemed capable of assessing an investment without those protections.
Recently, the corporate regulator has found instances where accountants bypassed these regulations and enabled retail investors to access investment opportunities that should only be available to sophisticated investors.
“ASIC is aware that, in certain recent fundraisings, some accountants have used trust or company structures that purport to allow investors who are not sophisticated investors to receive offers to purchase shares without a prospectus or other disclosure document,” the corporate regulator said.
An example of this is in the offer of shares by Kwickie International, ASIC said, adding that shares such as these “may not be offered to retail investors through a trust structure”.
“ASIC is continuing its investigation into the use of these structures. ASIC is also in discussions with the appropriate accounting professional bodies about this issue,” the corporate regulator said.
The way in which an investor’s assets are assessed to meet the sophisticated investor requirements needs to be “consistent with the reason these provisions are in the law” or retail investors would not benefit from the protections the law was designed to offer them, ASIC said.
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
