The Board overseeing the operation of the South Pacific Division (SPD) Deposit Fund has voted to close the fund in response to increasing regulations for charities offering financial products.
New regulations, announced recently by the Australian Securities and Investment Commission (ASIC), come into effect on January 1, 2018, and will require increased costs of compliance, and greater product disclosures and reporting to government.
SPD investment and financial services manager Virgilio Cadungog said these regulations would directly impact the operation of the Deposit Fund.
“Over the years ASIC has continually been tightening regulations for charities taking money on deposit or offering other investment products,” Mr Cadungog said.
“The options were to pay the high cost of compliance or to cease operating the Deposit Fund.”
Up to 70 per cent of the fund was used to help finance local church and school loans, with the balance invested in bank securities.
The fund has existed for more than 45 years and there are currently about 300 depositors. The balance of the accounts, together with any distribution accrued by December 31, 2017, will be returned to the depositors in early January.
“I would like to take this opportunity to thank the depositors for their support throughout the years,” Mr Cadungog said. “These funds have been of considerable benefit to the Church.”