ASIC strips AFS license from Epic Property Investments

The Australian Securities and Investments Commission (ASIC) has revoked Epic Property Investments Ltd's (Epic) Australian financial services (AFS) license, effective May 31, 2022, for failing to obtain a required insurance cover.

Epic has held its AFS license 239011 since February 26, 2004. It operates two registered managed investment schemes:

• Epic Diversified Property Fund ARSN 099 566 202; and
• Epic Property Investment Fund ARSN 099 566 211 (the Schemes).

However, ASIC found that Epic has not held professional indemnity (PI) insurance, a required insurance cover, since April 21, 2021. Therefore, it decided that the company does not provide retail clients with consumer protections required under the regulatory regime for AFS licensees.

Read more: ASIC releases updated financial reporting requirements for AFS licensees

Under the Corporations Act 2001, AFS licensees must have insurance cover to compensate retail clients for losses they suffer because of a breach of obligations by the licensee or its representatives, taking into account the nature of licensees' business and potential liability for compensation claims.

Under the terms of its AFS license's cancellation, Epic can operate under its AFS license until December 31, 2022, but only for:

• Providing financial services that are necessary for, or incidental to, the winding up of the Schemes; and
• Ensuring that members and former members of the Schemes continue to have access to an external dispute resolution scheme.

These conditions prevent the cancellation to adversely affect Epic's previous or current members, according to ASIC.