The Securities Commission says it has no grounds to take action on an offer to ING New Zealand investors that it has received a large number of complaints about.
ING New Zealand, which is part owned by ANZ, is holding a roadshow for a settlement offer to investors in the frozen ING Diversified Yield Fund and the ING Regular Income Fund.
The Securities Commission regulates security markets and aims to strengthen investor confidence in them.
The commission said the ING offer to purchase securities was not subject to the Securities Act but could be considered under section 13 of the Securities Markets Act, which prohibits conduct that is likely to mislead or deceive.
Based on available information, the commission did not consider that the offer was misleading or deceptive.
The commission is encouraging ING investors to carefully consider the offer.
ING has offered to purchase all units from investors at set prices and subject to conditions.
Investors who accept the offer must agree to release ING and related entities, and investment advisers, from all legal claims in connection with the funds.
Investors face a difficult decision because the value of any legal claims cannot be quantified at this time and the potential future value of the units in the funds is extremely difficult to calculate.
The commission said it has received a large number of complaints from investors and has reviewed the proposal documents sent out by ING.
The commission is keeping in contact with the Commerce Commission, the regulator of fair trading, as its investigation into marketing of the funds continues, and will assist where it can.
The issue arises at a time when regulation of markets and financial advisers is being reviewed around the world.
In March 2008, ING New Zealand announced it was suspending withdrawals from its ING Diversified Yield Fund and the ING Regular Income Fund, which then together had $521 million under management.
ING investors allege that ANZ financial advisers marketed the funds as being low to moderate risk when they invested in complex financial instruments, including collateralised debt obligations.
© 2009 AAP
