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Unexpected Frozen Fund Offers
A frozen fund is a registered managed investment scheme that was marketed on the basis that investors had an ongoing or periodic right to redeem their investments on request, but has since then suspended that right.
Some investors have received unexpected offers to buy their units in frozen funds, at prices less than the total amount that investors could expect to receive from their funds under a redemption facility or withdrawal offer.
If you receive an unexpected offer, and you are thinking about accepting it, you should:
a) make sure you try to understand how much your investment is really worth, and how and when you will be able to access your funds - call the responsible entity (the company that operates the registered scheme) of your fund to get information that will help with this;
b) think carefully before you accept an unexpected offer: do you really need to sell?
c) talk to the responsible entity of your fund or get advice from a licensed financial planner, so you can make an informed choice.
Some frozen funds expect to be able to provide members with access to their full entitlements, paid in instalments over time. In these cases it may not be in your best interest to accept a heavily discounted offer.
New Laws
Changes to the law that are expected to come into effect shortly will make it illegal for people to get copies of registers of shareholders or unit holders for improper purposes. That means it will be more difficult for people to get your contact details and make these unexpected offers.
Until then, if you receive an unexpected offer for your investment, speak to the company in which you hold shares, the responsible entity of your fund, or get independent advice from a licensed financial planner before accepting.
Additional Information
Downloads
- ASIC Info on Frozen Funds (921.5 KB)
