The Australian Securities and Investments Commission (ASIC) has signalled it is actively looking at greater standardisation of the terms used by research and ratings houses in issuing fund ratings.
The regulator confirmed its intentions while answering questions during Senate Estimates with ASIC Commissioner, Simone Constance, stating that ASIC is looking very closely at the relevance or value of disclosures.
Answering questions from Queensland Liberal Senator, Paul Scarr, Constance said that he had referenced the star ratings used by some research houses and the “looseness of such terms”.
“We’re looking at more standardisation of terms,” Constance said. “Because there is disclosure and effective disclosure.”
Scarr had asked ASIC during the Estimates hearing how platforms such as Diversa had been able to make funds such as Shield and First Guardian available for investment based on what appeared to be heavily subjective ratings house assessment.
“How did Diversa come to make the fund available for investment?” Scarr asked.
He said that First Guardian and Shield had blown up and asked “Are there other ticking time-bombs.?”
Constance said ASIC was trying to send a message to the broader sector about their trustee obligations and the funds they make available to your members and had been doing “a lot of thinking about these issues”.
“Some items of our work will be made public very imminently including oversight of advice deductions in terms of the relationships between advisers and trustees being very important to these platforms,” she said while also nominating ASIC’s prior work on non-performing products on platforms.
Constance said ASIC was also conducting a surveillance on complaints – platforms and non-platforms
She said the message ASIC was sending to platform super trustees was that “you have responsibilities to your end member, it doesn’t matter how you arrange yourself”.