In a statement on Monday, ASIC said it has made interim stop orders preventing Holon Investments Australia from offering or distributing three newly launched funds to retail investors because of non-compliant target market determinations (TMDs).
These funds include Holon Bitcoin Fund ARSN 659 090 294; Holon Ethereum Fund ARSN 659 090 516; and Holon Filecoin Fund ARSN 659 090 614.
The interim orders, which have been appointed for 21 days unless revoked earlier, stop Holon from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investments in the funds.
According to the corporate regulator, it made the orders to protect retail investors from “potentially investing in funds that may not be suitable for their financial objectives, situation or needs”, after Holon’s product disclosure statement revealed that assets in the funds could face a total loss of value.
ASIC said it is concerned that Holon “has not appropriately considered” the features and risks of the funds in determining their target markets.
“ASIC considers that the funds are not suited to the wide target market defined in the TMDs, which includes investors with a potentially medium, high or very high risk and return profile, and intending to use the fund as a satellite component (up to 25 per cent) of their investment portfolio, and intending to use the fund as a solution/standalone component (75 to 100 per cent) of their investment portfolio,” it added.
The corporate regulator urged Holon to take immediate steps to ensure compliance and warned that if its concerns are not addressed in a timely manner, final stop orders will be placed on the funds.
“Holon will have an opportunity to make submissions to ASIC before any final stop order is made,” it said.
“ASIC may consider further regulatory action in relation to Holon and the funds.”
To date, ASIC has issued 10 design and distribution obligations (DDO) interim stop orders, including the Holon funds, and six remain in place.
It confirmed that four interim stop orders have been lifted following actions taken by the entities to address ASIC’s concerns.
