The Australian Securities and Investments Commission (ASIC) has imposed a provisional ban on two funds offered by Perpetual Investment Management to retail investors.

The interim stay has been placed over the significant number of risks posed by the funds.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

The ban, which will last for 21 days if withdrew earlier, involves the Perpetual Pure Microcap Fund and Perpetual Geared Australian Share Fund.

According to ASIC, both the funds have ‘deficiencies in their target market determinations (TMDs)’.

The move allows ASIC to safeguard retail investors from making investments in funds that not benefit for their financial goals.

Perpetual Pure Microcap Fund was invested exclusively in a range of microcap equities based in Australia.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Such equities feature a substantial level of risk because of high price volatility as well as lower market penetration and the little operational history of microcap firms, stated ASIC.

The Australian regulator also noted that Perpetual Geared Australian Share Fund was invested in several Australian shares and used leverage. The fund also took on debts valued at around 60% of its total assets.

Its investment plan includes high risks, such as the possibility of a high level of volatility in terms of price and the use of leverage that could inflict heavy losses on investors.

However, Perpetual ignored these features and risks when distributing the funds, stated ASIC.

In a statement, ASIC said: “ASIC is concerned that Perpetual has not appropriately considered these features and risks in determining the wide target markets for the funds.”

The watchdog added: “ASIC considered that the TMDs did not meet the appropriateness requirements under design and distribution obligations (DDO) because they did not include any distribution conditions.”