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Financial Services Thinking - Issue 37

Read the latest edition of Financial Services Thinking where you’ll find a ‘hot tip’ about ASIC’s antidote to greenwashing as well as all the latest news from the corporate regulators.


Stark reminder about regulatory compliance in fundraising

In a stark reminder about the importance of regulatory compliance in fundraising activities, ASIC is pursuing civil penalty orders against Sasha Hopkins, a self-proclaimed property mogul in Melbourne, for allegedly raising over $32 million from investors without the necessary AFS licence. ASIC contends Hopkins used social media platforms to promote more than 25 investment schemes to ‘mum and dad’ investors, offering property investment opportunities. ASIC alleges Hopkins operated an unregistered managed investment scheme and unlicensed financial services business.

ASIC has taken action many times against unlicensed property development businesses that raise money from others to pursue opportunities. It is important you receive the right advice when setting up a property investment business – particularly if you are raising money from others (whether from ‘friends and family’ or otherwise).

Our Funds Management team understands the AFS regulatory landscape and can give you the right advice about how you should structure and operate your business. Reach out to our team for assistance.

ASIC pursues Vanguard again for greenwashing

ASIC has lodged civil penalty proceedings in the Federal Court against Vanguard Investments Australia alleging Vanguard mislead the public by representing all securities in the Vanguard Ethically Conscious Global Aggregate Bond Index Fund were screened against environmental, social, and governance criteria. ASIC alleges bonds exposed investor funds to investments which had ties to fossil fields, including those with activities linked to oil and gas exploration. ASIC has previously issued three infringement notices totalling $39,960 against Vanguard for separate greenwashing conduct which you can read about in our article recent ASIC sees red on greenwashing

Greenwashing is (and has been for some time) a hot issue for the regulator and it is important product issuers seek the right advice before offering or promoting products with green credentials.

Our Funds Management lawyers can answer your questions and provide guidance about greenwashing.


Ruling made by Federal Court in Crown matter

In one of the largest penalties ordered against a casino, the Federal Court has ordered Crown Melbourne and Crown Perth to pay a $450 million penalty for breaches of the anti-money laundering and counter-terrorism (AML/CTF) laws. Crown admitted its AML/CTF programs were not based on appropriate risk assessments, did not have appropriate systems and controls to manage their risks, and were not subject to appropriate oversight by their Boards and senior management.

Contact us for help complying with the AML/CTF laws.


Early consultation on Financial Accountability Regime

On 20 July, ASIC and APRA jointly released key materials for consultation to support the implementation of the Financial Accountability Regime (FAR) by the financial services industry. FAR will impose a strengthened responsibility and accountability framework for APRA-regulated entities in the banking, insurance, and superannuation industries and their directors and most senior and influential executives. In doing so, it is designed to improve the risk and governance cultures of those financial institutions.


Quarterly report on foreign investment

On 7 July, Treasury published the Quarterly Report on Foreign Investment for the period 1 January to 31 March 2023. This quarterly report sets out key performance data about the operation of Australia’s foreign investment regulatory framework. The next quarterly report is expected in August 2023.


ASIC’s antidote to greenwashing

In a recent article, ASIC concluded ‘only meaningful, responsible, and transparent disclosure will effectively combat greenwashing practices’. ASIC noted greenwashing erodes investor confidence in the market for sustainability-related financial products and corporate strategies, and it has taken 35 regulatory interventions against greenwashing activity in the nine months to March 2023. ASIC intervened where net zero statements and targets did not appear to have a reasonable basis or were factually incorrect, and where terms like ‘carbon neutral’, ‘clean’ or ‘green’ didn’t appear to have a reasonable basis for the related claims or there was use of inaccurate labelling or vague terminology in sustainability-related funds. Intervention was also required where the scope or application of a sustainability-related investment screen or exclusion was vague or overstated in a PDS or on associated websites for ESG-related financial products.

Contact our Funds Management lawyers for guidance about avoiding greenwashing and read our latest article ASIC sees red on greenwashing for more information.


Emma Donaghue

Emma Donaghue


Elliott Stumm

Elliott Stumm


Contact McMahon Clarke

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