Insolvency for investors
- What are the most common types of investments?
- What if my interest payments or distributions have not been paid?
- What if my ability to withdraw or redeem my investment has been frozen?
- What is insolvency?
- How does insolvency affect me if I am a shareholder?
- How does insolvency affect me if I am a debenture holder?
- How does the winding up of a managed investment scheme affect me?
- What if I have information about an investment or would like to register a complaint?
- Information sheet and guide
What are the most common types of investments?
The most common types of investments are shares, managed funds (also known as managed investment schemes) and unlisted investments such as debentures.
What if my interest payments or distributions have not been paid?
If you have not received your interest payment by the due date or an anticipated distribution from your investment, you should contact your investment company and seek financial advice on how the non-payment of your investment income will affect your personal circumstances.
What if my ability to withdraw or redeem my investment has been frozen?
A withdrawal (or redemption) freeze on your investment does not necessarily mean that the managed investment scheme or company you have invested in is insolvent. If you have been informed that your ability to withdraw your investment has been frozen and you are concerned, you should contact your investment company for further information.
You should consider seeking financial advice about how a freeze on withdrawing your investment will affect your personal circumstances. This will ensure that you are able to make the most informed decision in relation to your financial future.
What is insolvency?
How does insolvency affect me if I am a shareholder?
For further information go to Shareholders
How does insolvency affect me if I am a debenture holder?
With debentures, you lend your money to a business, usually for a fixed term. For this reason, debenture holders are usually creditors of a company.
The effect of the appointment of a voluntary administrator or liquidator (referred to as external administrators) or a receiver (alternatively controller, receiver and manager or managing controller), will be to place a freeze on any payments to you. The external administrator or receiver will then oversee an orderly realisation of the assets of the company and distribute the net proceeds to creditors in the order of priorities set out in the Corporations Act.
How does the winding up of a managed investment scheme affect me?
If your scheme is a registered managed investment scheme and is wound up, the winding up is to be conducted in accordance with the Corporations Act and the scheme constitution. If the winding up is ordered by a Court, the Court may make orders relating to the winding up. The investment manager is generally responsible for realising all of the assets of the scheme, deducting reasonable costs (including unpaid creditors) and distributing the balance, if any, amongst members pursuant to the constitution and according to their respective interests in the scheme.
What if I have information about an investment or would like to register a complaint?
Information sheets & guides
- Insolvency: A glossary of terms (INFO 41)
- Download investing publications from MoneySmart: Publications
- MoneySmart website
- ASX website
- Australian Shareholders' Association website
- Department of Veterans Affairs
- Storm Financial Investors (ASIC website)
- Westpoint Investors (ASIC website)