ASIC seeks restraints over alleged unlicensed promotion of offshore funds

Summary

ASIC has applied to the Federal Court for orders restraining Royce Capital Investments, Royce (Aust) Real Estate, Louie Kortesis and Paul Chiodo from promoting or accepting Australian investment in three offshore funds, or financial products generally. ASIC alleges that Royce Capital raised $1.536 million from five Australian SMSF investors without holding an Australian financial services licence and that promotional brochures included misleading representations about guaranteed or fixed annual returns of 13 per cent.

Why this matters

The proceeding highlights the need to confirm licensing requirements before promoting offshore investment products to Australian investors. Product promoters, distributors and referral partners should verify AFSL coverage, review financial promotion controls and ensure return representations are properly substantiated and qualified. The involvement of SMSF investors also reinforces the scrutiny applied to retirement savings entering complex or higher-risk arrangements. An offshore fund structure does not place Australian promotional activity offshore with it.