The Australian Securities and Investment Commission (ASIC) has suspended the Australian financial services licence of Gold Coast-based Equititrust Limited ACN 061 383 944 (Equititrust) for 12 months, for failing to comply with a number of key obligations as a financial services licensee. Equititrust is the responsible entity of the Equititrust Income Fund (EIF) and the Equititrust Priority Class Income Fund (EPCIF).

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 AUD5million 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 EIF, a registered managed investment scheme whose primary business is lending retail investors’ pooled funds for property development and taking mortgages over the property. Equititrust is also the responsible entity of EPCIF, another registered scheme, which is dormant. These schemes are to be wound up in accordance with orders made in the Supreme Court of Queensland on 21 November 2011.

The suspension of Equititrust’s AFS licence follows earlier action by ASIC to preserve the status quo of the schemes (refer ASIC Media Advisory AD 11-238D ASIC obtains orders against Equititrust Limited for further information).

The suspension of Equititrust’s AFS licence is part of ASIC’s ongoing efforts to improve standards across the financial services industry.

‘The compliance of Australian financial services licensees with their obligations is central to the informed and confident participation of consumers in the financial services markets’, says ASIC Chairman, Greg Medcraft (pictured).

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.