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Background


Shield Master Fund (Shield) was a registered managed investment scheme listed on the following superannuation platforms:

• Macquarie Wrap
• NQ Super
• Super Simplifier

Equity Trustees is the trustee for both NQ Super (which is a division of the AMG Super Fund) and Super Simplifier.

Shield was issued by Keystone Asset Management (Keystone). Keystone was also the Responsible Entity for Shield, which had reported Shield funds under management of $326 million at the end of the 2022/23 financial year. CF Capital, a related party of Keystone, was the investment manager of Shield.

In November 2023 Equity Trustees raised concerns with ASIC about financial advice being provided to members by certain Venture Egg advisers. These advisers were authorised to provide personal financial advice by Interprac Financial Planning Pty Ltd, the holder of an Australian Financial Services Licence. Equity Trustees’ concerns related to the compliance of the advice provided by the Venture Egg advisers with the requirements of the Corporations Act and relevant industry standards It transpired that the majority of Venture Egg’s advice recommended members invest their savings into Shield. Around the same time, Equity Trustees ceased accepting member contributions from persons advised by Venture Egg.

In December 2023 SQM Ratings downgraded the rating of all classes of Shield to “Hold”. Equity Trustees immediately stopped all new flows into Shield, and a few weeks later removed it from the Investment Menu for NQ Super and Super Simplifier. Equity Trustees also reported the matter to ASIC at around the same time.

Between February and June 2024 ASIC took action to halt new offers of investments in Shield, stop redemptions and appoint Deloitte to approve any payments out of the Shield Fund. Investors have not been able to access the amounts they invested in Shield since February 2024.

ASIC has also notified Equity Trustees that it is investigating Equity Trustees’ conduct in relation to Shield, and has served us with notices to produce documents and witness examinations of certain current and former staff. The cover letters for the notices state that “ the notice should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity.” It is too early to determine whether ASIC’s investigation will take any other form.

On Tuesday 27 August 2024 the Federal Court appointed Deloitte as receivers of Keystone and subsequently on 5 September also as Voluntary Administrators.

The issue has received high profile media coverage by both the 7.30 report and The Age and in AFR (both owned by nine.com.au).

There are approximately 2,800 investors in NQ Super and 70 in Super Simplifier who are now not able to redeem their Shield units (valued at an estimated $150 million), and no clarity around the current value of those units. An accurate unit price will not be known for some months (and potentially even years), but it is expected to be substantially negatively impacted. The matter could take some years to resolve.

The Deloitte Administrators held the first meeting of creditors on 9 September 2024. The relevant notice and agenda for the first meeting (which was issued by former Administrators Korda Mentha prior to their removal) is available from the Deloitte Administrators, accessible from their webpage: https://www.deloitte.com/au/en/services/financial-advisory/notices/keystone-asset-management-ltd.html.

At the first meeting of creditors, the Deloitte Administrators stated that, at this time, they expect to issue a report to creditors at the end of September, which has occurred. The second (virtual) meeting of creditors scheduled for 3 October 2024 has been postponed to 25 November 2024. That date may change.

At the second meeting, creditors will have the opportunity to make decisions about the future of Keystone and Shield.

Key Communication Dates


 
  • First Significant Event Notice (SEN) sent dated 10 May 2024 - VIEW HERE
    		•
  • Second Significant Event Notice (SEN) sent dated 12 August 2024 - VIEW HERE
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  • Third Significant Event Notice (SEN) sent dated 16 September 2024 - VIEW HERE
    		•
  • Fourth Significant Event Notice (SEN) sent dated 12 December 2024 - VIEW HERE
    		•
     Deloitte SEN’s
  • First Significant Event Notice (SEN) from Deloitte sent dated 22 November 2024 - VIEW HERE
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  • Second Significant Event Notice (SEN) from Deloitte sent dated 13 December 2024 - VIEW HERE
    		•
  • Annual Member Statement, for 1 July 2023 to 30 June 2024, will be sent to you by 31 December 2024.
    		•

    Frequently Asked Questions

    • WHAT HAS HAPPENED ?

      Between February and June 2024 ASIC took action to stop new investments and redemptions in Shield. In August, Deloitte was appointed as Receiver of Keystone’s assets, and in September Deloitte was appointed as Voluntary Administrator of Keystone with power to approve any payments out of Shield. Investors in Shield have not been able to access their funds since February 2024. Shield is an accessible investment that was available through financial advisers in both the NQ Super and Super Simplifier platforms up until December 2023.

    • WHAT IS EQUITY TRUSTEES RELATIONSHIP WITH SHIELD MASTER FUND ?
      • Equity Trustees is trustee of the NQ Super and Super Simplifier superannuation product platforms, which facilitate superannuation investments.
      • Equity Trustees does not provide personal financial advice in this role. Financial advisors, chosen and appointed by you, use the NQ Super and Super Simplifier platforms to invest your superannuation monies into a range of products that, until December 2023, included Shield. Those investments are made in accordance with a financial plan agreed between you and your adviser.
      • Equity Trustees has had no role in the management of Shield, an accessible investment that was available as a product option on the NQ Super and Super Simplifier platforms until December 2023.
      • In late 2023, Equity Trustees became concerned about the compliance of financial advice (including advice about Shield) being provided by certain financial advisers with the requirements of the Corporations Act and relevant industry standards. These advisers were recommending investments in Shield.
      • Equity Trustees reported the concerns to ASIC, and subsequently refused all new applications from these advisers from December 2023.

    • WHAT IS EQUITY TRUSTEES DOING ABOUT THIS SITUATION ?
      • In late 2023, Equity Trustees became concerned about the compliance of financial advice (including advice about Shield) being provided by certain financial advisers with the requirements of the Corporations Act and relevant industry standards. These advisers were recommending investments in Shield.
      • Equity Trustees reported the concerns to ASIC, and subsequently refused all new applications from these advisers from December 2023.
      • Equity Trustees is working closely with ASIC and the Deloitte Administrators and fully supports their investigations and steps taken by the regulator and Administrators to protect your investment in Shield.
      • Equity Trustees will notify you about any material updates with regards to Shield that is related to your Super and Pension account with NQ Super or Super Simplifier.

    • WHY I AM GETTING THESE SENS AND WHAT DOES IT MEAN ?

      • As the Trustee for NQ Super, Equity Trustees is required to update you as we become aware of any material change or event related to your super in the form of a SEN. As a result, the following SENs were sent to you upon Equity Trustee becoming aware of material changes:

      – First Significant Event Notice (SEN) sent dated 10 May 2024 VIEW HERE
      – Second Significant Event Notice (SEN) sent dated 12 August 2024 VIEW HERE
      – Third Significant Event Notice (SEN) dated 16 September 2024 VIEW HERE

      Equity Trustees will write to you again when we become aware of any further material updates with regard to Shield that is related to your account with NQ Super.


    • I DIDN'T KNOW I HAVE SUPER WITH NQ SUPER ?
      • You may have had a cold call some time ago from a person purporting to assist you with your super savings. This person might have been an adviser from Venture Egg, a person from a superannuation comparison website who passed your personal and financial details onto Venture Egg, or another person altogether. As a result of these cold calls, certain advisers from Venture Egg have been preparing Statements of Advice recommending that persons (like you) move their superannuation holdings into the NQ Super platform and invest those funds into Shield - an accessible investment option available in the NQ Super platform.
      • If you have a complaint about the financial advice or other services provided to you by your financial adviser, you should lodge your complaint with your financial adviser.
      • On joining NQ Super, you would have received a Welcome pack from us. Please check any correspondence you may have received from NQ Super or Equity Trustees for more information.

    • WHAT IS THE VALUE OF MY INVESTMENTS ?
      • The Deloitte Administrators issued a report to creditors at the end of September. It is confidential, but I can tell you that it does not contain a revised unit price indicating the value of your investments at this time. The Administrators have indicated that it will be some time before a revised unit price is able to be issued.
      • Equity Trustees are working closely with ASIC and the Administrators and fully support their investigations and any steps taken by them protect investor interests.
      • Equity Trustees will issue a notice, and your online account will be updated, with the updated value of Shield, once the valuation has been completed by the Deloitte Administrators.

    • CAN YOU GIVE ME ASSURANCE THAT MY SUPER IS OK ?
      • Equity Trustees is not able to provide any assurances of that kind. At the time you joined NQ Super, you would have received a Product Disclosure Statement from us which contained information in it about the risks of investments. We urge you to read that statement again.
      • The Deloitte Administrators issued a report to creditors at the end of September. It is confidential, but it does not contain a revised unit price indicating the value of your investments at this time. The Administrators have indicated that it will be some time before a revised unit price is able to be issued.
      • Equity Trustees are working closely with ASIC and the Administrators and fully support their investigations and any steps taken by them to protect your interests as member of NQ Super / Super Simplifier.
      • Equity Trustees will issue a notice, and your online account will be updated, with the value of Shield Master Fund, once the valuation has been completed by the Deloitte Administrators.

    • CAN I DO A PARTIAL WITHDRAWAL ?
      • The Court has suspended redemptions from Shield, meaning your holdings in the Shield investment option cannot be redeemed. You can transfer your remaining NQ Super holdings (i.e., those parts of your account invested in options other than Shield) to another superannuation fund of your choice.
      • Any requests for withdrawal or rollover-out to an external super fund received from you in relation to your account in NQ Super will therefore only be processed to the extent that they do not require the redemption of investments in Shield.

    • CAN I START A PENSION ?
      • Any request received to open a pension account in NQ Super will only be processed to the extent that they do not require the redemption of investments in the Shield Master Fund.

    • HOW CAN I TERMINATE MY ADVISOR ?
      • If you want to cease the relationship with your existing financial adviser, you should contact your adviser directly. In addition, you should cease the deduction of financial advice fees from your NQ Super account by contacting us at super@ddhgraham.com.au. It is only by contacting us in this way that you can instruct us to cease the ongoing deduction of those financial advice fees from your NQ Super.

    • AM I STILL PAYING ADVICE AND ADMIN FEES ON MY SHIELD MASTER FUND HOLDING ?
      • You previously authorised deductions of financial advice fees from your account. We continue to deduct these fees and pay them to your nominated financial adviser in accordance with those instructions. You can opt to terminate advice fee payments by giving us instructions in writing, but you will no longer receive advice from your nominated adviser after terminating fee arrangements.
      • If you have a complaint about the financial advice or other services provided to you by your financial adviser, you should lodge your complaint with your adviser.

    • CAN I GET A REFUND FOR ADVICE FEES I HAVE PAID ?
      • No, as you previously authorised deductions of financial advice fees from your account.
      • We continue to deduct these fees and pay them to your nominated financial adviser in accordance with those instructions. You can opt to terminate advice fee payments by giving us instructions in writing, but you will no longer receive advice from your nominated adviser after terminating fee arrangements.
      • If you have a complaint about the financial advice or other services provided to you by your financial adviser, you should lodge your complaint with your adviser.

    • HOW WILL THE ONGOING ADVICE BASED FEE BE
      CALCULATED ?
      • You previously authorised deductions of financial advice fees from your account. We will continue to deduct these fees and pay them to your nominated financial adviser in accordance with those instructions.
      • On 1 September 2024, Equity Trustees suspended payment of advice fees based on funds in Shield. Accordingly, if you’ve nominated a % based advice fee, those fees will not have been charged on your Shield holdings/investments in your Super account since 1 September 2024. This suspension will remain in place until the Deloitte Administrator releases an updated valuation for Shield, at which time advice fees will be calculated on the updated value of your Shield investment, backdated to 1 September 2024.

    • WHEN WILL I RECEIVE MY STATEMENT ?
      • Your annual member statement, for the period of 1 July 2023 to 30 June 2024, will be sent to you by 31 December 2024.

    • WHY CAN'T I ACCESS MY FUNDS ?
      On 18 June 2024, the Australian Securities and Investments Commission (ASIC) commenced a proceeding in the Federal Court of Australia (Court) against Keystone. On 26 June 2024, the Court made certain orders restraining the Shield Master Fund, which affect new contributions, withdrawals, rollovers and redemptions. These orders remain in operation until amended by the Court.

      The Court also made orders appointing Deloitte Financial Advisory Pty Ltd (Deloitte) to supervise transactions entered into by Keystone, as well as to prepare a report on the financial position of the Shield Master Fund.

      As a result, the suspension of redemptions from the Shield Master Fund remains in operation and will continue to do so until further notice. 

    • WHAT ARE ILLIQUID FUNDS ?
      • Illiquid funds are investments that cannot be quickly converted to cash, e.g., because there is no market on which they can be easily traded. Property investments of the kind in which the Shield Master Fund invested are a type of investment that is often considered illiquid.

    • WHAT HAPPENS NEXT ?
      The Deloitte Administrators held the first meeting of creditors on 9 September 2024. The relevant notice and agenda for the first meeting (which was issued by the former Administrators Korda Mentha prior to their removal) is available from the Deloitte Administrators, accessible from their webpage: https://www.deloitte.com/au/en/services/financial-advisory/notices/keystone-asset-management-ltd.html

      At the first meeting of creditors, the Deloitte Administrators stated that, at this time, they expect to issue a report to creditors at the end of September, which has occurred. The second (virtual) meeting of creditors scheduled for 3 October 2024 has been postponed to 25 November 2024. That date may change.

      At the second meeting, creditors will have the opportunity to make decisions about the future of Keystone and the Shield Master Fund.

      Important information may also be communicated by the Deloitte Administrators to creditors prior to the Second Meeting.

      We will provide updates from time to time via direct communications and this webpage.

      Further information may also be made available by the Deloitte Administrators, accessible from their webpage:
      https://www.deloitte.com/au/en/services/financial-advisory/notices/keystone-asset-management-ltd.html

    • WHAT SUPPORT CAN I GET ?

      • We are unable to provide you with personal financial advice; you can (and we urge you to) obtain personal advice having regard to your personal circumstances.

      • If you have a complaint about the financial advice or other services provided to you by your financial adviser, you should lodge your complaint with your adviser and consider obtaining further advice from a different adviser.

      The Complaints Officer
      NQ Super
      PO Box 3528
      Tingalpa DC, QLD 4173
      Ph: (07) 3899 7272

      For standard enquiries our email address is super@ddhgraham.com.au however for complaints our email address is supercomplaints@ddhgraham.com.au

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