ASIC Takes Action And Warns Australian Investors Against Non-Compliant Offshore Investments

LAWFUEL – The NZ Legal News Service – The Australian Securities and Investments Commission (ASIC) today issued a warning to Australian investors about investing in offshore financial products that do not comply with local requirements.

The warning follows recent advertisements by a New Zealand company, Asset Finance Ltd, in the Australian press offering investment opportunities with returns in the range of 9.75 to 12 per cent per annum for debenture stocks. While investors in this case were directed to a New Zealand website and could invest via a New Zealand prospectus, a prospectus was not lodged with ASIC and did not, therefore, comply with Australian disclosure requirements.

‘Australian investors should take extreme care before investing overseas as they may not be protected by Australian law. If you take up an offer of securities from an overseas entity that has not complied with Australian law or deal directly with an overseas broker, you may lose the protections provided by Australian law’, ASIC’s Executive Director, Consumer Protection, Mr Greg Tanzer said.

ASIC has obtained an undertaking from Asset Finance Ltd to cease making further offers in Australia other than in full compliance with Australian requirements. ASIC has been informed that in this particular case the offer was unsuccessful and no funds were actually raised in Australia.

Under Australian law, every business that gives investment advice must be licensed by ASIC and companies that offer shares or other securities to the public must issue a prospectus and lodge a copy with ASIC.
‘The prospectus is an essential document that tells you what you need to know to assess the risks of an investment including information about the company offering the investment and the investment itself. While it’s not a guarantee of performance, you can use the prospectus to make an informed decision about whether or not to invest your money. If you’re unsure about whether a particular investment is right for you, or about what your investment strategy should be, ASIC suggests seeking professional financial advice from a licensed financial adviser’, Mr Tanzer said.

ASIC’s dedicated website for consumers and investors, FIDO at contains free and independent information about different investments and how to invest.
ASIC appreciates the assistance of the Securities Commission of New Zealand which was provided under the IOSCO Multilateral Memorandum of Understanding.

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