Regulator suspends licence after breach

The Australian Securities & Investments Commission has suspended the financial services licence of Gold Coast-based Equititrust Limited for 12 months for failing to comply with a number of its key obligations.

ASIC found that Equititrust has breached its legal obligations and licence conditions in that it failed to:

• comply with its obligation to maintain at least $5million net tangible assets;
• prepare and lodge annual audited financial statements and to provide annual financial reports to members of EIF and EPCIF for the financial year ended 30 June 2011; and
• lodge compliance plan audits for EIF and EPCIF for the financial year ended 30 June 2011.

Equititrust is the responsible entity of the Equititrust Income Fund (EIF) and the Equititrust Priority Class Income Fund (EPCIF).

In November ASIC obtained various interim orders in the Supreme Court of Queensland against Equititrust Limited constraining the manner in which Equititrust is permitted to operate the two managed investment schemes.

The suspension of Equititrust’s AFS licence follows earlier action by ASIC to preserve the status quo of the schemes.

The orders obtained by ASIC on 27 October 2011 restrained Equititrust from undertaking various acts regarding its operation of the schemes until 12 December 2011.

A spokesperson for ASIC said the suspension of Equititrust’s AFS licence is part of the regulator’s ongoing efforts to improve standards across the financial services industry.

ASIC may revoke the suspension in the event Equititrust meets its legal obligations and licence conditions.

Equititrust has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.