Melbourne Securities Corporation Limited has settled an infringement notice issued by the Australian Securities and Investments Commission (ASIC), paying $13,320. ASIC alleged that Melbourne Securities made misleading statements regarding its Bloom Climate Impact Fund.
In the period of March 2022 to June 2023, Melbourne Securities, described to be acting as the trustee and responsible entity of the Bloom Fund, included statements in the fund’s product disclosure statement (PDS) indicating that the fund would avoid investing in various excluded activities, including fossil fuels. However, ASIC asserted that despite these statements, the Bloom Fund employed revenue thresholds allowing investments in companies deriving up to 33% of their revenue from excluded activities, such as fossil fuels. These thresholds were allegedly undisclosed to investors and contradicted the statements in the PDS.
ASIC argued that permitting companies to derive up to 33% of their revenue from excluded activities does not align with the objective of avoiding investments in such activities. The regulatory body claimed that due to these revenue thresholds, the Bloom Fund made a direct investment in General Electric Co, which derived 16% of its revenue from fossil fuels in the 2022 financial year. At the time of acquisition in March 2022, General Electric represented 0.96% of funds under management and was divested in May 2023.
An ASIC media release noted, however, that the payment of the infringement notice by Melbourne Securities does not imply an admission of guilt or liability.
As part of ASIC’s focus on sustainable finance enforcement, the regulatory body has issued 16 other infringement notices related to alleged ESG (environmental, social, and governance) misconduct. These notices involve various entities, including Morningstar, Future Super, Black Mountain Energy, Diversa Trustees Limited, Vanguard Investments Australia, TIou Energy Limited, and Northern Trust Asset Management.
Furthermore, ASIC has initiated three greenwashing-related civil penalty actions before the Federal Court against Mercer Super, Vanguard Investments Australia, and Active Super.
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