Anti-Money Laundering and Counter-Terrorism Financing

#5317 Reply

samantha-h
Member

Hi John,

 

Thank you for your question.

 

Past performance information may be used in marketing material for a financial service so long as it is not from an inappropriate or irrelevant investment period (ASIC RG53 at 9.1(a)).  The issue is that the period the product was unlicensed may constitute an inappropriate period for direct comparisons.

 

However, “non-actual” performance information may be used given the product has not existed for long enough to produce “actual” past performance data (ASIC RG53 at 11.1) so long as specific terms are used to differentiate it clearly from “actual” data.

 

As such, you can use the data from both back tests and from your time operating without an AFSL (providing this was in compliance with the law) so long as it is appropriately demarked from data created while the AFSL is in place.

 

ASIC warns at RG11.1.2 that this has been a major problem area for misleading promotional material. It warns producers to exercise extreme care.

 

With regard to the second question, an AFS licence is required if the provider wishes to provide financial services within Australia regardless of the nature or origin of the investor.

 

Please feel free to contact our financial services team if you would like further assistance.

 

Author: Samantha Hills (Senior Lawyer)

Co-contributor: Hugo Sasse (Law Clerk)

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