ASIC has suspended the Australian financial services (AFS) licence of Queensland-based financial services provider Investors Exchange Limited (IEL) for a period of six weeks, effective 15 January 2021.
IEL is the responsible entity of Investors Exchange Fund (ARSN 127 384 767) and Investors Exchange Investment Fund (ARSN 120 933 093) (collectively referred to as ‘the Schemes’). IEL also previously operated Dean Capital Property Trust No. 1 (ARSN 120 932 309) (refer Background).
The licence was suspended because IEL failed to comply with financial services laws and maintain competence to provide the financial services covered by its AFS licence. Specifically, IEL:
- failed to lodge its annual financial statements and auditor reports by the requisite date for the financial years ending 2014, 2016, 2017, 2018 and 2019;
- failed to lodge the compliance plan auditor’s reports for Investors Exchange Investment Fund by the requisite date in 2014 and 2016, and for both Schemes by the requisite date in 2017, 2018 and 2019; and
- failed to comply with the compliance plan for Dean Capital Property Trust No. 1 in 2012; and
- issued defective product disclosure documents in 2018 and 2019 (refer 18-274MR, 19-217MR).
The suspension will allow IEL time to review its competence and take steps to ensure compliance with its obligations as an AFS licensee. ASIC has used its power under s915H of the Corporations Act to allow IEL to provide financial services that are reasonably necessary for the day-to-day operation of the Schemes while the suspension is in place. During the suspension, IEL cannot issue new interests in the Schemes. IEL is also specifically prohibited from:
- granting any further security over the existing assets of the Schemes; and
- offering redemption of interests in the Schemes unless this is offered equally to all Scheme members.
IEL has the right to seek a review of ASIC’s decision at the Administrative Appeals Tribunal.
IEL (ACN 116 489 420) has held AFS licence number 299024 since 9 August 2006.
Under a previous version of its AFS licence, IEL was authorised to operate the registered managed investment scheme SMSF Invest Property Fund, formerly known as Dean Capital Property Trust No. 1. IEL operated Dean Capital Property Trust No. 1 between 9 August 2006 and 18 December 2012.