FMA aware of ASIC enforcement on Vanguard

The Australian Securities and Investments Commission (ASIC) has taken action against greenwashing for the second time. Last week it issued three infringement notices to investment manager Vanguard Investments Australia related to claims about the exclusion of tobacco.

The same fund is available in New Zealand through the DIY investment platform InvestNow, and New Zealand’s financial regulatory body the Financial Markets Authority (FMA) says it is aware of ASIC’s enforcement action and has no further comment at this stage.

Enforcement action against greenwashing is a current priority of ASIC. In October it issued infringement notices against Tlou Energy which paid A$53,280. On this side of the Tasman, the FMA has also flagged greenwashing as an area of major concern, declaring on its website that “it’s illegal to mislead or confuse investors by suggesting or omitting certain information. The FMA can take action to stop or prevent this behaviour. Contact us if you think a company is ‘green-washing’ and can’t back up their claims.” It has yet to take action against any party.

In the Vanguard case, the ASIC was concerned that Product Disclosure Statements for the Vanguard International Shares Select Exclusions Index Funds (the Vanguard Funds) may have been liable to mislead the public by overstating an exclusion of companies involved in significant tobacco sales.