Regulator initially placed stop orders over concerns of inappropriate level of portfolio allocation
The Australia Securities and Exchange Commission (ASIC) has lifted the two interim stop orders it dished out to alternative asset manager La Trobe Financial last week.
ASIC placed the stop orders on the 12 Month and 2 Year Accounts of the La Trobe Australian Credit due to alleged deficiencies in the target determination for both products.
In placing the stop orders, which temporarily prohibited La Trobe from offering, distributing, or providing the products, ASIC said the target market for the funds suggested an “inappropriate level of portfolio allocation given the risks of the fund”.
They also “do not include appropriate distribution conditions”, added ASIC at the time.
However, La Trobe has announced that the two interim stop orders have now been lifted.
As part of this process, La Trobe Financial has updated its Target Market Determinations (TMDs) and introduced customer questionnaires.
A TMD is a document that outlines who a financial product is suitable for and how it should be distributed. It is accessible to investors on the La Trobe Financial website.
La Trobe chief executive Chris Andrews (pictured) said in a statement: “We welcome ASIC’s decision and are pleased to have worked constructively with the regulator on this matter.
“The stop orders didn’t relate to the funds’ performance, liquidity, advertising or the product disclosure statements. We champion transparency and welcome the opportunity to improve our TMDs for the benefit of investors. We also look forward to further engagement with ASIC as they continue with their review of the private credit industry.”
La Trobe is now in the process of re-opening its investor platform, La Trobe Direct.
Andrews added: “Our focus remains on delivering consistent, risk-aware outcomes for our investors. Since the establishment of our flagship 12 Month Term Account 23 years ago, all of our portfolio accounts have exhibited consistent income returns, 100% capital preservation and flawless liquidity. This performance profile has been underpinned by disciplined credit selection and robust risk management.”
