ASIC has made interim stop orders preventing MPG Funds Management Limited (MPG) from offering or distributing two trusts to retail investors because of deficient target market determinations (TMDs). These trusts are:

  • MPG Bulky Goods Retail Trust; and
  • MPG Essential Services Property Trust (together, the Trusts).

The interim orders stop MPG from issuing interests in, giving a product disclosure statement for, or providing general advice to retail clients recommending investments in the Trusts. The order is valid for 21 days unless revoked earlier.

ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs. To date, ASIC has issued 15 DDO interim stop orders, including the interim orders for the Trusts.

The Trusts are solely invested in a concentrated portfolio of commercial properties. They have an investment term during which investors have no ongoing withdrawal rights and employ leverage, which increases the level of risk for investors.

ASIC is concerned that MPG has not appropriately considered these features and risks in determining the target markets for the Trusts because the TMDs include investors:


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  • with a tolerance for an undefined ‘medium risk’;
  • wanting stable and regular income distributions; and
  • needing liquidity or needing to make withdrawals during the investment term for the Trusts.

ASIC also considered that the distribution conditions in the TMDs did not meet the appropriateness requirement under the design and distribution obligations (DDO) because these conditions were not specific enough to make it likely for the Trusts to reach consumers in the target market.

Lastly, ASIC considered that the TMDs did not adequately specify:

  • the information that distributors must report for MPG to promptly identify the occurrence of a review trigger (or any event/ circumstance) that would suggest that the TMDs were no longer appropriate;
  • the period for reporting this information to MPG; and
  • the review triggers for the TMDs.

ASIC expects MPG to consider the concerns raised regarding the TMDs and take immediate steps to ensure compliance. ASIC will consider making a final order if its concerns are not addressed in a timely manner. MPG will have an opportunity to make submissions before a decision is made about a final stop order.

ASIC reminds financial product issuers that under DDO, they must define target markets for their products appropriately, having regard to the risks and features of their products. Issuers also need to consider how their product will reach the target market and have appropriate distribution conditions in place to ensure the product is directed towards the target market.