Minister says ‘more work to be done’ on fund collapses, no warnings ignored

Responding to shadow financial services minister Pat Conaghan’s questioning in Parliament last week, Mulino pushed back on the suggestions that the government had “ignored warnings from Treasury and ASIC to effectively regulate” managed investment schemes.

“What I can say is I haven’t ignored any warnings,” the minister said.

X

Continue to Website

“When I was notified of this matter earlier this year, I very quickly sought a briefing from my department in relation to the matter. Following on from that, having found out about these matters, I wrote to APRA to receive briefings from APRA in relation to what further actions might be needed in relation to platforms.

“I’ve been working constructively with the Financial Services Council and with the industry on that matter. Furthermore, I’ve written to ASIC in relation to whether or not capital holding requirements of MISs are sufficient.”

Mulino added that Treasury has provided briefings around how the government could “strengthen regulatory arrangements going forward”.

“I would say to this chamber and, of course, to the member who’s asked this question that, as we consider options going forward, I certainly look forward to working constructively with members of this House in order to find ways we can strengthen arrangements going forward,” he added.

Conaghan had probed why the government had not acted despite beginning a review of MISs in March 2023.

The review’s progress had been halted while the parliamentary joint committee (PJC) on corporations and financial services conducted a spin-off review of the wholesale and sophisticated investor thresholds, which ultimately decided not to take any action in February this year.

However, in the months since, there has been no word on the MIS review seeing the light of day, with Conaghan accusing the government of burying the review.

“Billions of dollars of everyday Australians’ retirement savings are now at risk, lost in the collapse of dodgy schemes like First Guardian and Shield, all of them so-called managed investment schemes,” he said in September.

“What were the recommendations? Could implementing those recommendations have protected these investors? Could they have protected hard-working Australians who have done the right thing and now have lost everything? We simply don’t know because this government has bizarrely buried its own report.

“The government should be providing answers to everyday Australians, but, once again, Labor are asleep at the wheel.”

While he denied that he had ignored any warnings, Minister Mulino acknowledged that more needs to be done to ensure impacted Australian’s are not left without retirement savings.

“I want to acknowledge from the outset how distressing this has been for many people who have lost considerable amounts of funds. There are many individuals and families who have lost a significant proportion of their life savings. I’ve met with victims of these collapses. I have heard firsthand harrowing stories, and I understand how difficult this has been,” he said.

“Can I stress that the focus of ASIC, the independent regulator, over recent months has been to protect investor funds, and it has undertaken a range of actions to do so. It has a range of actions already underway in court.

“This includes actions in relation to financial advisers involved in these collapses. It also involves actions against individuals involved in the managed investment schemes. Importantly, there were also significant actions in relation to the platforms.”

The minister pointed specifically to Macquarie’s decision to reimburse its members the $321 million needed to fully return their capital investment.

“A significant proportion of the investors in the Shield MIS will see a full return of their capital,” he said.

“But I do acknowledge that there is more work to be done, and I continue to work with ASIC and with other regulators in relation to the immediate priority of protecting investor interests.”