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ASIC places stop order on Skyring fund advertisements

— 1 minute read

ASIC has clamped down on advertisements for the Skyring Fixed Income Fund, imposing a stop order. 

The stop order prohibits the fund’s responsible entity, Skyring Funds Management, from promoting or making statements that compare the fund to term deposits or offer a fixed return without proper risk warnings. 

This action follows an ASIC review of recent radio advertisements for the fund, which found the advertisements contained misleading or deceptive statements.

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The regulator concluded that Skyring’s adverts were misleading or deceptive because hey suggested that investments in the fund had the same or a similar level of risk as bank-issued products.

However, the fund carried significantly higher financial risk than bank-issued deposit products.

The fund’s underlying assets include notes issued by a related entity and secured by securities over commercial, industrial, residential and retail properties.

ASIC has signalled that it may consider further regulatory action in relation to the fund and Skyring. 

In June, the regulator warned investors to be wary about advertising that compares fixed-term investment products to bank term deposits. 

Skyring was one of seven responsible entities told to correct their advertising in relation to a total of 13 funds. 

As a result, Skyring removed an image comparing the fixed income fund’s return to term deposits from its website, as well as a statement that its fund is capital stable and investor testimonials. 

In August, ASIC received a misconduct report from a member of the public raising concerns that the fund was being falsely promoted as a term deposit in a series of radio advertisements airing between June and August. 

Then, in September, ASIC reviewed and subsequently imposed the stop order on the radio advertisements.

The corporate watchdog is continuing to monitor the advertising and labelling of managed funds in the current economic environment.

 

 

ASIC places stop order on Skyring fund advertisements
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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