ASIC has expressed concern that in some instances, accountants have facilitated retail investors acquiring shares offered by a company without adequate, or any, disclosure. In particular, ASIC is aware that in certain recent fundraisings, some accountants have used trust or company structures that purport to allow investors who are not ‘sophisticated investors’ to receive offers to purchase shares without a prospectus or other regulated disclosure document.
This has recently occurred in relation to offers of shares by Kwickie International Limited (Kwickie) and, to put the issue beyond doubt, ASIC has made a declaration that Kwickie shares may not be offered to retail investors through a trust structure.
ASIC has stressed the importance of applying the sophisticated investor test in a way that ensures that retail investors are afforded the safeguards in making appropriate investment decisions that the law explicitly provides for.
ASIC is continuing its investigation into the use of these structures, and is also in discussions with the appropriate accounting professional bodies about this issue.
See ASIC’s media release dated 7 July 2017.