In In the matter of Fiducian Investment Management Services Pty Ltd [2026] NSWSC 959 the Supreme Court of NSW declared that Fiducian Investment Management Services Limited (FIMS), contravened section 12DF of the Australian Securities and Investments Commission Act (ASIC Act) and section 601FC(1)(b) of the Corporations Act 2001 (Cth), by making false or misleading statements in relation to investments in the Diversified Social Aspirations Fund (DSA Fund) and by failing to monitor its investment managers.
Penalties totalling $7.3m were imposed on Fiducian.
FIMS is the holder of Australian Financial Services Licence and the Responsible Entity for a suite of registered managed investment schemes.
The DSA Fund was operated and managed by FIMS using the “Manage-the-Manager” investment system.
Each of the underlying investments of the DSA Fund had specified “investment screens”, being a set of investment rules or filters applied by the underlying manager to determine which companies or shares were aligned with the specific environmental, social and governance (ESG) standards or objectives of that fund.
The underlying investments did not exclude investments in shares or companies that derived revenue wholly or substantially from fossil fuels.
Each version of the DSA Fund PDS stated “Fiducian constantly monitors the Fund’s underlying investment managers to ensure that they maintain their investment styles and processes”.
FIMS admitted that by making statements about the DSA Fund’s ESG investments, and by failing to withdraw or qualify those statements, FIMS represented that, amongst other things, the DSA Fund would only make investments, amongst other things, in companies that were considered to be positive for society and the environment.
FIMS also admitted it represented that the portfolio exposure of the DSA Fund (including exposure through any underlying investments) would be monitored to ensure that such exposure was in accordance with the ESG Statements; and the investment managers making investments on behalf of the DSA Fund (including through the underlying investments) would be constantly monitored to ensure that they maintained their investment styles and processes.
FIMS accepted that it did not provide any specific training to staff in relation to ESG or ethical investing.
The trial judge said that penalty of $5 million in relation to the contravention of s 601FC(1)(b) of the Corporations Act, and a penalty of $2.3 million in relation to the contraventions of s 12DF(1) of the ASIC Act, was appropriate, as it took into account the extent of FIMS’s failures over a period of several years, and in particular its failure to discharge its duties to act with care and diligence, and also took into account FIMS’s contrition and co-operation, as well as the steps which it has taken to improve its systems and processes.u
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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
