Guardian Trust told to improve compliance
Complaints laid following the restructure of the Guardian CashPlus Fund have been found by the Securities Commission not to be material, although the firm has been cautioned to improve compliance.
Wednesday, October 14th 2009, 5:00AM
by Sonia Speedy
Two complaints about process were laid with the commission after the restructure of the fund in November last year so that it might benefit from the Crown Retail Deposit Guarantee Scheme. This involved separating out mortgage assets from the fund's cash assets, with Guardian Trust guaranteeing any potential shortfall in the new mortgage fund that was created.
Guardian Trust head of product management Phil Morgan-Rees says the commission found that the 2007 prospectus was not sufficiently clear on how changes to investments in the fund could be made.
This was despite the prospectus complying with what Guardian Trust describes as a well established format. It has since moved to amend the wording in the document, despite disagreeing that it was unclear.
"Our view was that by following our established format, it contained all the appropriate information. The commission didn't share that view," Morgan-Rees says.
There was also an oversight in registering a deed amendment relating to the fund, but that had been noted and rectified by the company before the commission contacted it, he says.
A Securities Commission spokesperson confirmed that the matters raised in the complaints were not material and unlikely to affect investors, but that Guardian Trust had been cautioned to improve compliance with the law.
Guardian Trust managing director Greg Campbell says the company had worked with the commission over several months, supplying more information than was required in the interests of co-operation and transparency.
"We have written to our investors to inform them of this outcome. Guardian Trust takes its responsibilities seriously," he says.
The mortgage fund that was separated out in the restructure is in wind-down.
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