The Australian Securities and Investments Commission (ASIC) has issued its first interim stop order on a superannuation product under the design and distribution obligations.
It halted the offer of Spaceship Super along with three managed funds promoted by Spaceship Capital due to deficiencies in their target market determinations (TMDs).
Spaceship Super was a sub-plan of Tidswell Master Superannuation Plan, issued by Diversa Trustees.
Meanwhile, the three managed funds – Spaceship Earth Portfolio, Spaceship Origin Portfolio, and Spaceship Universe Portfolio, were issued by Spaceship Capital as the responsible entity.
ASIC considered that the target market in the TMD for the Spaceship Super product was defined too broadly, and had not properly taken into account the risks of the product options.
Its concerns included:
- a mismatch between the investment risk profile of the investment options (very high) and the return profile identified for investors within the target market (high);
- 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;
- insufficient consideration of the investment risk features associated with the investment options.
Similarly, ASIC considered that the target markets in the TMDs for the Spaceship Voyager Funds were defined too broadly, and had not properly considered the risks and features of the three funds.
As of 30 June 2022, Spaceship Super had 18,000 members and held approximately $550 million in assets under management.
The interim orders were served on 31 May 2023 and were valid for 21 days unless revoked earlier. Diversa and Spaceship Capital would have an opportunity to make submissions to ASIC before any final stop orders are made.
The interim orders were issued to protect consumers and retail investors from acquiring products that may not be suitable for their financial objectives, situation or needs.
