Macquarie to pay back super members $321m after admitting to Shield Master Trust contraventions
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More news: Australian Securities and Investments Commission (ASIC) deputy chair Sarah Court told the media its decision not to seek a civil penalty for Macquarie did not mean it was being lenient.
“We have got misconduct, in ASIC’s view, in the lead generators, in the advisors, in the funds themselves, in the research houses and in the trustees.
"And the significance of this result, to some extent, is that Macquarie is making those investors whole despite the culpability of many in that chain. Don't let that suggest or send a message at all that we are letting anyone off the hook,” Court said.
“We are in the process of having people pulled out of the advice industry, AFSL [Australian financial services licences] cancelled, and have a range of matters underway.
“I know people are impatient to see heads on sticks and court outcomes. We are working through things in a methodical, determined way and we'll continue to do that.”
Court also noted there was a lot of consideration being given by both the regulator and Treasury on the right policy settings for managed investment schemes (MIS).
She said current parameters were broad with little oversight as there is no requirement for MIS to provide data or information to ASIC.
“If we put different kind of parameters around managed investment schemes, that may help these kinds of investors in the future [but it could] potentially take away investment opportunities for a whole range of other people. So these are complex policy issues,” she said.
On whether the regulator or Treasury would change things for trustees to curb misconduct, Court said given today’s outcome she would be “surprised” if trustees were not “very carefully examining the funds that it has on its platform, the processes, the investment governance framework that sits around that”.
Court also said ASIC and Treasury would need to think differently about whether funds could be made available on trustee platforms.
“There's the deterrent message sent by our court cases, and then there's some policy changes that are needed that no doubt the government would explore,” she said.
Currently one of the protections is that investors can only invest in the super choice funds on a platform if they have received financial advice. However, she said this had been a failure.
Macquarie to pay back super members $321m after admitting to Shield Master Trust contraventions
The news: Macquarie Investment Management (MIML) has admitted to contravening the Corporations Act after 3,000 superannuation fund members it was a trustee for were invested into the collapsed Shield Master Fund.
Macquarie has committed to paying back members the amount they invested in under a court-enforceable undertaking.
The numbers: MIML oversaw about $321 million in super investments into Shield by 3,000 members between 2022 and 2023. Shield was an investment available on Macquarie’s super platform.
The context: The superannuation trustee admitted that it did not act efficiently, honestly and fairly as it failed to place Shield on a watch list for heightened monitoring.
The Australian Securities and Investments Commission (ASIC) has commenced proceedings in the Federal Court against MIML.
ASIC is not seeking to impose a civil penalty on the matter as Macquarie agreed to pay members the amount invested in Shield less any amounts withdrawn, without waiting for an outcome of the Shield liquidation or proceedings against other parties involved.
Other reasons included:
- The strong public interest in obtaining a timely court-based outcome which will encourage other superannuation trustees to comply with their legal obligations in the context of choice platforms; and
- The interests of providing affected members who invested into Shield through a regulated superannuation fund with certainty in a timely manner.
What they said: ASIC deputy chair Sarah Court said: “Many members thought their funds were safe when they used Macquarie’s super platform to invest in Shield, which had no track record.
“ASIC’s investigation will see Macquarie return these members to the position they were in before their retirement savings were eroded.”
Court also said that super trustees offering choice platforms were on notice.
“They are gatekeepers for retirement savings. ASIC expects them to take active steps to monitor the funds they make available to members through their platforms,” she said.
The source: ASIC media release
