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ARTICLE · 13 FEBRUARY 2024

Regulatory Rumbles: Can An Issuer Be Held Liable For A Distributor's Conduct?

Herbert Smith Freehills Kramer LLP
Explore more from Herbert Smith Freehills Kramer LLP

Increasingly, ASIC has sought to hold product issuers responsible for the conduct of other entities down the distribution chain. The recent case of ASIC v Diversa Trustees Limited...

AustraliaFinance and Banking
Michael Vrisakis
Michael Vrisakis
Maged Girgis
Maged Girgis
Andrew Bradley
Andrew Bradley
Tamanna Islam
Tamanna Islam
Madeline Muddle
Madeline Muddle

Increasingly, ASIC has sought to hold product issuers responsible for the conduct of other entities down the distribution chain. The recent case of ASIC v Diversa Trustees Limited [2023] FCA 1267 (Diversa) is an example of this.

In this edition of Regulatory Rumbles, we explore this trend and examine the legal bases for holding product issuers responsible for the distribution conduct of their representatives, service providers and other intermediaries in the distribution chain.

How far does the concept of 'issuing' extend?

'Issuing a financial product' is one form of 'dealing' and is therefore a financial service for the purposes of Chapter 7 of the Corporations Act 2001 (Cth) (Corporations Act).1 However, 'issuing' is not defined in the Corporations Act.

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