Spaceship issued stop order by ASIC
Spaceship is the first superannuation fund to be slapped with stop orders, which have also been applied to its Voyager Funds series.
The orders apply to the Spaceship Earth Portfolio, Spaceship Origin Portfolio, Spaceship Universe Portfolio, and Spaceship Super - marking the first time a super fund has been penalised with stop orders under the Design and Distribution Obligations.
The orders were served on May 31, barring Spaceship Capital and its issuer Diversa from distributing or providing financial product advice to retail clients recommending the products.
ASIC is concerned the existing target market determination for Spaceship Super has too broad of a target market and does not adequately account for the product's risks.
ASIC says the target returns for the investment options were too low to be consistent with investors in the target market, who were identified as seeking high returns, and also that there was a mismatch between the investment risk profile of the options versus the investors. Further, there had been insufficient consideration given to associated investment risk features, like concentration, market and currency risks.
"Furthermore, ASIC considered that the distribution conditions in the TMD were not appropriate to ensure that Spaceship Super would likely be distributed to consumers in the target market," it said.
ASIC held similar concerns about the Voyager Funds, saying the risk profiles of the products (very high risk) did not match those of the target markets (medium and high). The TMDs also stated a potential investment timeframe of two years or more, when the PDS states seven years.
In a statement, Spaceship said: "In complying with the interim stop order, Spaceship has temporarily suspended the ability for new customers to sign up to the Spaceship Universe Portfolio, the Spaceship Earth Portfolio, and the Spaceship Origin Portfolio (together, the Spaceship Voyager portfolios), as well the ability for current customers to make additional investments."
"Spaceship has also temporarily suspended distribution of Spaceship Super in its capacity as promoter... Spaceship notes Diversa has been issued an interim stop order relating to this product.
"Spaceship is taking immediate steps to address ASIC's concerns and is committed to working proactively to address the issue."
Spaceship Super currently has about $550 million in assets, while there's about $450 million held across the Voyager range.
This article first appeared on Financial Standard
Get stories like this in our newsletters.
