In a statement on Friday, the corporate regulator said it has made interim stop orders on one superannuation product and three managed funds promoted by Spaceship Capital due to deficiencies in their target market determinations (TMDs).
The order made in respect of Spaceship Super is the first interim stop order on a superannuation product under the design and distribution obligations, the Australian Securities and Investments Commission (ASIC) confirmed.
Overall, the funds included are Spaceship Super, a sub-plan of Tidswell Master Superannuation Plan, issued by Diversa; and Spaceship Earth Portfolio (ARSN 643 773 282), Spaceship Origin Portfolio (ARSN 623 312 087), and Spaceship Universe Portfolio (ARSN 623 321 022), which together, form the Spaceship Voyager Funds, issued by Spaceship Capital as the responsible entity.
“The interim orders stop Diversa and Spaceship Capital from issuing interests in, giving a product disclosure statement (PDS) for, or providing financial product advice to retail clients recommending an investment in, Spaceship Super and the funds,” ASIC said, adding that it made the interim orders to protect consumers and retail investors.
The orders were issued on 31 May 2023, and will remain in effect for 21 days unless withdrawn sooner, with ASIC able to impose permanent orders if the identified concerns are not promptly resolved.
Regarding the super product, ASIC stated that it believed the target market for the Spaceship Super product, as outlined in the TMD, was excessively broad and failed to adequately address the associated risks of the product options.
ASIC’s concerns included:
- the target returns for the investment options were too low to be consistent with investors in the target market, who were identified as seeking high returns;
- a mismatch between the investment risk profile of the investment options (very high) and the return profile identified for investors within the target market (high); and
- insufficient consideration of the investment risk features associated with the investment options, including concentration, market and currency risks arising from the way in which the products are invested.
Similarly, the corporate regulator was also concerned that the target markets in the TMDs for the Spaceship Voyager Funds were defined too broadly.
ASIC’s concerns included:
- a mismatch between the investment risk profiles of the Spaceship Voyager Funds (very high-risk) and risk profiles identified for investors within the target markets (medium and high). The target markets included investors who intend to hold the funds as a core component (25–75 per cent) or standalone component (75–100 per cent) and the funds invests in a single asset class (i.e. shares);
- a potential investment timeframe of two years or more where the suggested minimum investment timeframe in the PDS is seven years; and
- the target markets included investors with a need to withdraw money daily when withdrawals would usually be paid within five business days and may be suspended or delayed for longer than 21 business days.
As of 30 June 2022, Spaceship Super had 18,000 members and held approximately $550 million in assets under management (AUM), Spaceship Earth Portfolio held $40.6 million in AUM, Spaceship Origin Portfolio held $50.8 million in AUM and Spaceship Universe Portfolio held $360.8 million in AUM.
