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APRA appoints acting trustee to superannuation funds operated by Trio Capital Limited - ASIC takes licensing action against Trio Capital Limited

Thursday 17 December 2009

 

The Australian Prudential Regulation Authority (APRA) has suspended Trio Capital Limited (formerly Astarra Capital Limited) as the trustee of its four superannuation funds and one pooled superannuation trust, and has appointed an Acting Trustee to manage these five entities.

APRA suspended Trio and appointed an Acting Trustee as a result of numerous breaches of Trio Capital Limited’s licence conditions and Trio not being able to satisfy APRA’s concerns regarding the valuation of superannuation assets. The Acting Trustee of the superannuation entities is ACT Super Management Pty Ltd, a subsidiary of McGrathNicol.

The four main superannuation funds — Astarra Superannuation Plan, Astarra Personal Pension Plan, My Retirement Plan, and the Employers Federation of NSW Superannuation Plan — have approximately 10,000 members and their last reported assets as at end September 2009 totalled $300m. Total assets under management in the various Trio Capital Limited superannuation entities and registered managed investment schemes, for which Trio is the Responsible Entity, are approximately $426 million. The total number of non superannuation investors is 732. The superannuation entities have significant investments in the Astarra Strategic Fund (ASF), one of the Trio Capital Limited managed investment schemes. The ASF financial statements for the year ended 30 June 2009 show total assets of around $118 million.

The Australian Securities and Investments Commission (ASIC) has also suspended the Australian Financial Services Licence held by Trio Capital Limited, under which it acts as responsible entity of 24 registered managed investment schemes, including the Astarra Strategic Fund.

Trio Capital Limited has been placed into external administration. Trio, under the control of its administrators , Stephen James Parbery, Neil Singleton and Nicholas Martin of PPB, will continue to act as responsible entity of the registered schemes until a replacement responsible entity is found or the schemes are wound up.

APRA and ASIC have been working closely in their separate investigations into the affairs of the Trio Capital Limited superannuation entities and managed investment schemes (including underlying funds of those schemes) and will continue to do so.

ASIC will work with PPB to ensure the interests of the members of the registered schemes are protected during this period.

The Acting Trustee has been appointed by APRA to protect the interests of the superannuation fund members. The Acting Trustee will be required to provide APRA with a report setting out among other things a plan of its proposed course of action in respect of the ongoing and future management of the superannuation entities. The administrators have been similarly appointed to protect the interests of the members of the registered managed investments schemes.

Investors with interests in these funds should refer to the significant event notice for the Trio superannuation funds which is to be posted on the Trio Capital Limited website. Investors can also call ASIC’s Infoline on 1300 300 630.

Background

ASIC commenced an investigation of the Astarra Strategic Fund on 2 October 2009. On 21 October 2009, ASIC issued a stop order on the product disclosure statements for Astarra Superannuation Plan, Astarra Personal Pension Plan, My Retirement Plan and three related sub-funds of My Retirement Plan. The effect of the stop orders was to prevent new issues of interests in the schemes and superannuation funds to investors.

ASIC also issued a stop order on 16 October 2009 in relation to the product disclosure statements for Astarra Conservative Fund, Astarra Balanced Fund, Astarra Growth Fund, Astarra Strategic Fund, Astarra Covered Call Fund and Astarra International Covered Call Fund.

APRA issued directions freezing the assets of the four main superannuation funds on 21 October 2009 for one month (subsequently extended to 19 February 2010) to minimise the risk that transactions with fund members would occur on unit prices that may not be reliable.

While the freezing orders are in place the four superannuation funds are precluded from accepting contributions and rollovers, making benefit payments or transfers to other funds or allowing investment switching. In addition, Trio undertook to ensure that redemptions from the managed investment schemes and all superannuation funds did not occur. However, APRA has permitted, on a limited basis, monthly pension payments and certain other payments to be made but their continuation will be subject to ongoing assessment by the Acting Trustee and APRA.

Trio Capital Limited

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6 trillion in assets for Australian depositors, policyholders and superannuation fund members.