FMA warning to Vanguard Australia

The FMA issued the formal warning to Vanguard for failing to lodge a required notice on the Disclose Register that it had incurred three ASIC infringement notices last November, for claims about the exclusion of tobacco in its Vanguard International Shares Selection Exclusion Index Funds offered to Australian investors.

The same funds are also offered to New Zealand investors through the Trans-Tasman Mutual Recognition (MRSO) regime and distributed through DIY-investment platform InvestNow.

The MRSO regime allows Australian financial product issuers to operate in New Zealand without needing to comply with all the provisions of the Financial Market Conduct Regulations on the basis that ASIC undertakes core supervisory action.

Under regulation 273(7) of the FMC regulations, Vanguard was required to provide the Disclose Register with notice of enforcement action by the ASIC by the 18th of November 2022. When Vanguard didn’t file the notice, the FMA intervened and the filing was completed in February this year, 55 days after the ASIC infringement notices were issued.