In a statement, the Australian Securities and Investments Commission (ASIC) announced it was taking action to place interim stop orders on activities relating to the Trilogy Monthly Income Fund and Trilogy Melbourne Office Syndicate, Cheltenham – of which Trilogy is the responsible entity.
The interim stop orders have been placed specifically on the PDSs and associated advertising for these two schemes.
An ASIC investigation into the schemes found a number of concerns with the fund manager’s PDS activity, including the use of “headline rates of return” and the use of “ratings statements” without providing additional relevant information.
In addition, the regulator found a number of disclosure failures, including “failure to address benchmark disclosures or meet disclosure principle information standards as outlined in relevant ASIC regulatory guides”, and concerns around a lack of “clear, concise and effective disclosure of the structure and nature of the product being offered”, as well as “comparisons of the schemes to other financial products without disclosing the differences between these products”.
In announcing the stop orders, ASIC commissioner Greg Tanzer said inaccurate portrayal of financial products can lead to risky or poor financial decisions.
“It is important that disclosure documents and advertisements are clear, accurate and balanced, and when comparing products in an ad, the products should be similar enough to make the comparison relevant and not misleading,” Mr Tanzer said.
“This is especially the case when consumers are looking for lower risk products and/or higher yields in an uncertain global financial environment.”
