The crux of the matter is whether OneAnswer is a bare trust, where providers of trustee and nominee services hold funds on behalf of other people and have no discretion over the investment of the securities and no beneficial interest in them, according to the Treasury website. The trusts are covered by the guarantee, provided that the bare trustee can demonstrate that the beneficiary of the bare trust would have been an eligible retail investor if they had held the debt security personally.
In an update, ING told advisers the government department could not confirm in advance that claims will be accepted under the deed of guarantee, and that any claims would have to be tested on their individual merits.
"We recognise that this level of uncertainty is far from satisfactory, however we wanted to communicate this with you as a matter of priority," the adviser update said. "In the light of this uncertainty, advisers are encouraged to review their client arrangements."
A Treasury spokesman told Good Returns OneAnswer's arrangements were complicated and the department is working through the matter and expects to be able to offer some guidance in the next couple of days.
It is understood Treasury will treat each application under the guarantee on a case-by-case basis.
ING says it has between $600 and $700 million under administration in OneAnswer, however it would not disclose how much of that was in government guaranteed debt securities.
It is suggesting to advisers that they move government guaranteed debt securities out of the wrap and back into ht names of investors.
Meanwhile New Zealand's other major wrap provider, ASB-owned Aegis, is expected to communicate with advisers on the issue soon.
| « Lonsec research bound for New Zealand | KiwiSaver mismatch a 'huge challenge' for advisers » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved