ASIC warning on foreign products
Wednesday, October 17, 2007/
The Australian Securities and Investments Commission has warned investors about investing in non-compliant offshore financial products, following advertisements by a New Zealand company, Asset Finance Ltd, offering debenture stocks with returns in the range of 9.75% to 12% a year.
Investors were directed to a New Zealand website and a New Zealand prospectus, but 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,” ASIC’s executive director, consumer protection, Greg Tanzer says.
“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.”
Asset Finance has undertaken to stop advertising that does not comply with Australian regulations. ASIC says 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.