investor daily logo

ASIC places interim stop order on managed fund

By Jessica Penny
3 minute read

The regulator has halted the offers of Shield Master Fund.

The Australian Securities and Investments Commission (ASIC) has made interim stop orders on four product disclosure statements (PDSs) for classes of units of the Shield Master Fund, a registered managed fund promoted by Keystone Asset Management.

In a statement on Wednesday, the regulator said the interim orders prevent Keystone from offering, issuing, selling or transferring interests in the balanced class, growth class, high growth class, and conservative class units of the fund.


“ASIC made the interim orders to protect retail investors from acquiring products under PDSs that may be defective and not worded and presented in a clear, concise, and effective manner,” it said.

It is understood that ASIC is concerned that the PDSs for the fund may have:

  • Contained misleading statements regarding Keystone’s legal role in unregistered schemes the fund has invested in.
  • Inadequately disclosed the nature, quantum and risks associated with the fund’s investments in unregistered funds related to Keystone.
  • Contained misleading statements about the level of diversification of the assets of the fund.
  • Inadequately disclosed the performance fees that may apply.
  • Used inappropriate asset classifications to describe the investments in the underlying funds and the investments within those funds.
  • Given the impression that investors can make weekly withdrawals from the fund when redemptions are at the absolute discretion of Keystone and may be subject to a two-year redemption lock-up period.
  • Inadequately disclose the conflicts of interest associated with investments in funds related to Keystone or how Keystone managed those conflicts;
  • Failed to disclose a change in the directors of Keystone or any information about the new director, their skills, experience and role.
  • Failed to disclose the fund’s investment approach to ethical considerations in a clear, concise and effective manner.
“ASIC will consider making final orders if the concerns are not addressed in a timely manner. Keystone will have an opportunity to make submissions before a decision is made about any final stop orders,” the regulator added.

ASIC is able to issue a stop order where it believes a PDS includes misleading statements or does not include information about any significant risks associated with holding the product, the fees and costs associated with an investment in the product, or information about other significant characteristics or features of the product or of the rights, terms, conditions and obligations attached to the product.

It may also have grounds to issue a stop order where a PDS does not include any other information that may reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, and whether to acquire the product or where the information included in the PDS is not worded in a clear, concise, and effective manner.

ASIC places interim stop order on managed fund

The regulator has halted the offers of Shield Master Fund.

ID logo

Comments powered by CComment