Fund Products, Company and Regulatory Updates as at 28 August 2017

Products Updates

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QVG launches first fund
Former Ausbil small-cap managers Tony Waters and Chris Prunty have launched QVG Opportunities Fund. Through the fund, the duo will invest in listed companies outside of the S&P/ASX100.

Charter Hall launches office fund
Charter Hall Direct has launched an unlisted office property fund to invest in office buildings around Australia. This fund is suitable for retail self-managed super fund trustees and high-net-worth investors. PFA currently has six office buildings in Adelaide, Victoria, New South Wales, Western Australia, Tasmania and Queensland.

Company Updates

Challenger announces relationship with MS&AD
Challenger has announced a strategic relationship with Japanese firm MS&AD Insurance Group Holdings. Challenger received a $500 million equity injection from MS&AD, with Challenger supporting MS&AD with a $500 million equity placement.

AZ NGA acquires advice practice
AZ Next Generation Advisory (AZ NGA) has completed its 31st transaction in two years after acquiring Farrow Hughes Mulcahy (FHM) from Charter Financial Planning. The purchase includes a share swap of 49 per cent of FHM equity for AZ NGA shares with a 10-year progressive buy-back agreement.

Regulatory Updates

Big four banks change loan contracts
The big four banks have agreed to specific changes with ASIC to eliminate unfair terms from their small business loan contracts. This change comes after the commitment to further review small business loan contracts.

Changes include:

  • The loan document will not include clauses that absolve the bank from responsibility for conduct, statements or representation made outside the written contract
  • Operation of the banks indemnification clauses will be significantly limited
  • Clauses that give banks the power to terminate the loan for unspecified negative changes to the customer's circumstances have been removed
  • Banks have restricted their ability to vary contracts to specific circumstances

Customers who entered or renewed contracts from 12 November 2016 will benefit from these changes.

Super fees to be more transparent
How superannuation and managed investment funds disclose fees and charges will change from 30 September 2017. ASIC identified a significant amount of under-reported fees and an inconsistency in the way fees and charges are listed by funds. The change will help bring an industry-wide consistency to what must be included in a product disclosure statement.

CBA shareholder class action
Maurice Blackburn Lawyers and IMF Bentham have partnered to open registrations for Commonwealth Bank (CBA) shareholders who purchased ordinary shares between 17 August 2015 and 3 August 2017 for a class action against the bank. Maurice Blackburn has noted that in light of AUSTRAC legal proceedings against the bank, shareholders have suffered a significant share price drop.

Maurice Blackburn said that AUSTRAC alleges that CBA contravened the AML/CTF Act on more than 53,000 occasions. The statement goes on to say that CBA said its board was aware of the breaches in the second half of 2015 but chose to say nothing to the ASX until 4 August 2017.

According to Maurice Blackburn this may be the largest shareholder class action in Australian history.

APRA gives notice to super funds
The Australian Prudential Regulation Authority (APRA) will consult on proposed changes to the superannuation prudential framework. These changes will see funds come under more scrutiny for spending, the use of reserves and the setting of fees and costs. Policies and procedures to establish, implement, monitor and review business plans and the achievement of strategic objectives have also been proposed.

CBA updates review and remediation actions for staff underpayments
Commonwealth Bank review and remediation actions milestones:


  • The payment scope has been expanded to all employees and all types of payments going back eight years.
  • The first lot of payments is estimated to total $16.7 million plus interest.
  • 36,000 current and former employees will be contacted for additional payments.

Credit Card Plus insurance refund

  • Customers who purchased Credit Card Plus insurance that may not have met employment criteria for the period between 2011 and 2015 will receive refunds.
  • Refunds are expected to total roughly $10 million including interest for approximately 65,000 customers.

Home Loan Protection insurance refund

  • Customers who purchased Home Loan Protection insurance in 2016 were charged the incorrect premium so will be refunded.
  • So far roughly 9,600 customers have been refunded a total of approximately $586,000 including interest.
  • The investigation is ongoing.

Charges on disputed card transactions

  • Certain charges associated with disputed transactions were not always correctly adjusted.
  • 4.5 million disputed going back to 2009 were reviewed.
  • Roughly $5 million including interest will be refunded to around 355,000 customers.