FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Netwealth Investments Limited [2026] FCA 1186

ORDERS

THE COURT DECLARES THAT:

1.    Netwealth Investments Limited (ACN 090 569 109) (NIL), in operating the Netwealth Superannuation Master Fund (NSMF) (between around 26 March 2021 and 30 June 2021), failed to do all things necessary to ensure that the financial services covered by its financial services licence were provided efficiently, honestly and fairly, in contravention of ss 912A(1)(a) and 912A(5A) of the Corporations Act 2001 (Cth) (the Act) where:

(a)    having regard to the apparent nature and characteristics of the First Guardian Master Fund (FGMF), NIL did not obtain and, therefore, did not assess sufficient information about the FGMF, and did not make sufficient independent enquiries, to understand or evaluate investment risk in the First Guardian Diversified Strategies Class (Diversified Class) or the First Guardian Growth Strategies Class (Growth Class) investment options prior to or while offering those investment options to members with an interest in the NSMF’s Super Accelerator Plus product;

(b)    in the circumstances described in paragraph (a) above, NIL:

(i)    approved the Diversified Class and Growth Class as investment options made available to members for selection;

(ii)    while NSMF trustee, made investments in the Diversified Class and Growth Class at the direction of members up to an investment limit of 100% of the member’s account (less any minimum cash holding which the affected member was required to maintain); and

(iii)    while NSMF trustee, continued to offer the Diversified Class and Growth Class as investment options on the investment platform maintained and operated by NIL through which members holding an interest in the NSMF and financial advisers authorised to act on behalf of those members could:

A.    access and operate their cash account in the NSMF;

B.    select, and give direction to the NSMF trustee to acquire or divest an investment in a range of investment options made available by the NSMF trustee; and/or

C.    access information about their investments;

(Netwealth Platform)

(c)    while NSMF trustee, it did not inform NSMF members of the potential illiquidity of the Diversified Class and Growth Class investment options while they were offered to members.

2.    Netwealth Superannuation Services Pty Ltd (ACN 636 951 310) (NSS), in operating the NSMF (from 1 July 2021 to around 27 May 2024), failed to do all things necessary to ensure that the financial services covered by its financial services licence were provided efficiently, honestly and fairly, in contravention of ss 912A(1)(a) and 912A(5A) of the Act, where:

(a)    having regard to the apparent nature and characteristics of the FGMF, NSS did not obtain and, therefore, did not assess sufficient information about the FGMF, and did not make sufficient independent enquiries, to understand or evaluate investment risk in the Diversified Class or the Growth Class investment options while offering those investment options to members with an interest in the NSMF’s Super Accelerator Plus product;

(b)    in the circumstances described in paragraph (a) above, NSS:

(i)    while NSMF trustee, made investments in the Diversified Class and Growth Class at the direction of members up to an investment limit of 100% of the member’s account (less any minimum cash holding which the affected member was required to maintain);

(ii)    while NSMF trustee, continued to offer the Diversified Class and Growth Class as investment options on the Netwealth Platform;

(c)    while NSMF trustee, it did not inform NSMF members of the potential illiquidity of the Diversified Class and Growth Class investment options while they were offered to members, prior to 6 December 2022; and

(d)    on or after removing the Diversified Class and Growth Class from the investment “menu” administered by NIL on or around 22 December 2022, NSS did not inform NSMF members whose accounts recorded an investment in those classes of concerns held about the FGMF relevant to a member’s future investment directions about their investment.

THE COURT ORDERS THAT:

1.    The defendants are to pay the plaintiff’s costs of the proceeding as agreed, or in the absence of agreement, to be taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCEVOY J:

1    By an originating process dated 17 December 2025, the plaintiff, the Australian Securities and Investments Commission (ASIC), alleges that the defendants, Netwealth Investments Limited (NIL) and Netwealth Superannuation Services Pty Ltd (NSS), engaged in conduct that contravened ss 912A(1)(a) and 912A(5A) of the Corporations Act 2001 (Cth) (the Act). The relevant conduct involved the provision of financial services covered by the defendants’ respective Australian financial services licences; that is to say, dealing in superannuation products and provision of a superannuation trustee service.

2    At all material times the defendants were part of the Netwealth group of companies. They both are, and were at all relevant times, bodies corporate incorporated under the Act and holders of an Australian financial services licence. These licences authorised them to carry on a financial services business to, among other things, provide general financial product advice for certain classes of financial products including superannuation, deal in a certain class (or classes) of financial products including superannuation, and provide a superannuation trustee service to retail clients and, in respect of NIL, wholesale clients.

3    In the period from 27 February 2002 until 30 June 2021 NIL was trustee of the Netwealth Superannuation Master Fund (NSMF) and held the beneficial interests acquired by members in the NSMF in its capacity as custodian of the fund. Until 30 June 2021 NIL was the holder of a Registrable Superannuation Entity (RSE) licence. The second defendant, NSS, took over the position of trustee of the NSMF on 1 July 2021 and is, and has been, the holder of an RSE licence from that date.

4    ASIC contends that in operating the NSMF, NIL (between around 26 March 2021 and 30 June 2021) and NSS (from 1 July 2021 to around 27 May 2024) failed to do all things necessary to ensure that the financial services covered by its financial services licence were provided efficiently, honestly and fairly in contravention of s 912A(1)(a) and s 912A(5A) of the Act.

5    The defendants have admitted the contraventions alleged by ASIC. The parties have jointly prepared and filed a statement of agreed facts and admissions (SAFA) as well as a supplementary statement of agreed facts and admissions (Supplementary SAFA) for the purposes of s 191 of the Evidence Act 1995 (Cth). While the court is not required to accept the SAFA and Supplementary SAFA uncritically, in this case I accept them as credible and cogent, and proof of the facts they contain. The effect of the SAFA and Supplementary SAFA is that evidence to prove the facts that they contain is not necessary, and the court has before it a sufficient factual foundation to support the exercise of its power to make declarations and impose a penalty: Evidence Act s 191(2); Minister for the Environment, Heritage and the Arts v PGP Developments Pty Limited [2010] FCA 58; 183 FCR 10 at [35] (Stone J); Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [12] (Beach J).

6    In addition to the SAFA and Supplementary SAFA, the parties filed joint submissions on liability and relief on 24 April 2026. They have also provided a proposed minute of orders including declarations of contravention which ASIC, NIL and NSS jointly submit should be made in relation to the admitted contraventions of ss 912A(1)(a) and 912A(5A) of the Act.

7    As part of the resolution of the proceeding, NIL and NSS have also given a court enforceable undertaking pursuant to s 93AA of the Australian Securities and Investments Commission Act 2001 (Cth), by which they have implemented and executed a compensation scheme for all “affected investors” (Undertaking). I will describe the Undertaking and its terms in further detail later in these reasons.

8    The relief proposed by the parties, consistently with the terms of the originating process, comprises:

(a)    declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that NIL and NSS have contravened s 912A(1)(a) of the Act;

(b)    declarations pursuant to s 1317E of the Act that NIL and NSS have contravened s 912A(5A) of the Act; and

(c)    an order that the defendants pay ASIC’s costs of the proceeding as agreed, or in the absence of agreement, to be taxed.

9    For the reasons that follow I am satisfied that liability has been established and that it is appropriate for the court to make the proposed declarations and to make the order as to costs which has been agreed. There will therefore be declarations and orders substantially in the terms proposed by the parties.

RELEVANT BACKGROUND

10    Given the agreement of the parties as to the relevant facts, the application of the law to those facts, and the appropriate relief, in these reasons I have drawn from the SAFA and Supplementary SAFA, and extensively from the parties’ joint written submissions. The SAFA and Supplementary SAFA are annexed to these reasons, and I will not describe the underlying facts in any more detail than is necessary to explain why I am satisfied that the proposed declarations should be made.

Overview of the NSMF and the Netwealth Platform

11    The NSMF is a regulated superannuation fund within the meaning of s 19(1) of the Superannuation Industry (Supervision) Act 1993 (Cth), and therefore a “registrable superannuation entity” and a “superannuation entity” within the meaning of s 10(1) of that Act.

12    The NSMF was established by trust deed on 27 February 2002. It is, and was at all relevant times, a “choice” superannuation fund in which the NSMF trustee – relevantly NIL until 30 June 2021 and NSS from 1 July 2021 – selected investment options to be added to an investment menu available to members holding a superannuation product through the NSMF.

13    The investment menu was made available to members of the NSMF through an online platform maintained and operated by NIL at all material times (Netwealth Platform). The Netwealth Platform allowed members and financial advisers authorised to act on behalf of those members to:

(a)    select from a range of investment options made available by the NSMF trustee;

(b)    direct the NSMF trustee to invest the member’s funds in any of those investment options; and

(c)    access information about their investments.

14    When a member or a member’s financial adviser directed the NSMF trustee to invest their funds in any of the investment options offered on the Netwealth Platform, the member acquired a beneficial interest in the NSMF. Those interests were held by NIL in its capacity as NSMF trustee prior to 1 July 2021, and thereafter as custodian on trust for NSS in its capacity as NSMF trustee. A member’s interest is in the assets of the NSMF as a whole, but the value of the specific investments selected is notionally allocated to the member’s account in the NSMF.

15    The investment options available on the investment menu through the Netwealth Platform were selected and approved according to criteria contained in the NSMF Investment Strategy, which was approved and adopted by NIL from 28 August 2020 and by NSS (as incoming trustee of the NSMF) on 12 February 2021. This process for selection and approval of investment options was delegated by NIL to its Asset Administration team or Investment Management and Research team based on those criteria. The operation of the NSMF Investment Strategy and other policies and procedures which provided the framework for selecting, managing and monitoring investment options available on the Netwealth Platform and the investment menu are set out in the SAFA.

16    As at 30 June 2025, the NSMF had 111,891 member accounts and approximately $37.51 billion in member benefits under management. The total assets, total liability for members’ benefits and number of member accounts of the NSMF between 30 June 2020 and 30 June 2024 (encompassing the relevant period of November 2020 to May 2024) is set out at paragraph [14] of the SAFA.

The First Guardian Master Fund

17    The First Guardian Master Fund (FGMF) is a registered managed investment scheme. At all relevant times, the responsible entity of the FGMF was Falcon Capital Limited (Falcon) and the investment manager was First Guardian Capital Pty Ltd (First Guardian Capital).

18    Relevantly, the FGMF offered to investors units in three investment classes:

(a)    the First Guardian Defensive Strategies Class (until 27 May 2024) (Defensive Class);

(b)    the First Guardian Diversified Strategies Class (until 15 January 2024) (Diversified Class); and

(c)    the First Guardian Growth Strategies Class (until 27 May 2024) (Growth Class).

19    Each of the above listed classes was expressed to invest in a number of underlying funds which were named in the product disclosure statement issued by Falcon in respect of that class.

20    Since around 27 May 2024, new applications to and redemptions from the FGMF have been suspended.

21    On 9 April 2025, by order of this Court, Falcon was placed into liquidation and the liquidators of FGMF were directed to wind up the FGMF and its sub-funds.

THE CONTRAVENING CONDUCT

Approval of the FGMF Classes as investment options

22    The admitted contraventions firstly relate to the process undertaken by NIL of reviewing and approving the Diversified Class and Growth Class as investment options available to members for selection from the investment menu on the Netwealth Platform. This process took place between 27 November 2020 and 26 March 2021.

23    ASIC alleges, and NIL admits, that as a result of this review process and prior to approving the Diversified Class and Growth Class as investment options NIL was aware that the FGMF:

(a)    had limited performance history (having been established in 2019);

(b)    had, as at the end of January 2021, funds under management of approximately $14 million in the Defensive Class, $51 million in the Diversified Class and $39 million in the Growth Class;

(c)    had an investment structure (which was potentially conflicted) by which the FGMF was invested, or would be invested, in unlisted units in a combination of underlying sub-funds:

(i)    that were determined by First Guardian Capital as the investment manager;

(ii)    of which Falcon was the trustee;

(iii)    which may have been illiquid and have lock in periods;

(iv)    whose particular investments and assets were unidentified and may have been located overseas; and

(d)    had, in respect of the Diversified Class, a significant proportion of investments in direct/unlisted assets that were less liquid or illiquid.

24    The parties agree that these characteristics gave rise to investment risk to members who invested in FGMF, including the potential for overstatement of asset value and misstatement of investment category and risk/return profile, underperformance, delays in repayment and loss of income and principal invested.

25    ASIC alleges, and NIL admits, that in these circumstances and prior to approving the Diversified Class and Growth Class as investment options NIL did not:

(a)    obtain, and therefore did not assess, copies of any FGMF compliance plan required by Pt 5C.4 of the Act, the FGMF managed investment scheme constitution, product disclosure statements for any of the sub-funds of the FGMF, or internal Falcon and First Guardian Capital policies about related party conflicts, investment due diligence, investment execution or investment valuation;

(b)    verify the implementation of any of Falcon or First Guardian Capital’s policies about related party conflicts, investment due diligence, investment execution or investment valuation, or the FGMF compliance plan, including through reviewing external audits of them;

(c)    identify all or any sample of the assets held by FGMF or any of the sub-funds in which the FGMF was invested for ownership or conformity with the description of the assets in which that sub-fund would invest;

(d)    review the valuation or liquidity of any of the assets held by the sub-funds in which FGMF was invested; or

(e)    undertake any stress testing of those classes.

26    On about 26 March 2021, NIL approved the inclusion of the Diversified Class and Growth Class on the investment menu on the Netwealth Platform. Both investment options were available to NSMF members holding the “Super Accelerator Plus” product. The parties jointly submit, and I accept, that at the time of approval neither investment option was identified on the Netwealth Platform as being illiquid, despite NIL staff (including the decision-maker responsible for approving each of the Diversified Class and Growth Class for inclusion on the investment menu) considering that both classes were illiquid. Despite this, NIL determined the investment limit for the FGMF to be 100%. As a result, members of the NSMF holding the Super Accelerator Plus product could direct the NSMF trustee to invest up to the entirety of their superannuation within the NSMF into either of the Diversified Class and/or the Growth Class (subject to maintaining a minimum cash holding in their cash account).

Offering and monitoring the FGMF Classes as investment options

27    The admitted contraventions continued to occur during the entire period that the Diversified Class and Growth Class were available as investment options on the Netwealth Platform; that is to say between 26 March 2021 and 28 December 2022. During that period 1,303 NSMF members invested a total of $128,508,067.51 in either or both of the Diversified Class or the Growth Class of the FGMF.

28    NIL admits that during the period 26 March 2021 until at least 27 May 2024 it did not undertake any of the steps referred to above at paragraph [25]. NSS further admits that, while NSMF trustee, it did not require NIL to take any of those steps nor did it take any of those steps itself. The parties jointly submit, and I accept, that as a result of these failures, neither NIL or NSS obtained, and therefore did not assess, sufficient information about the FGMF to understand or evaluate investment risk in the Diversified Class or Growth Class while offering those classes as investment options on the Netwealth Platform.

29    From about 6 December 2022, NIL identified each of the Diversified Class and Growth Class as “illiquid” on the investment menu on the Netwealth Platform available to NSMF members holding the Super Accelerator Plus product. NSMF members who had an existing recorded investment in the FGMF classes were not, however, otherwise informed that it had done so. ASIC alleges, and both NIL and NSS admit, that they did not, before around 6 December 2022, inform members of the NSMF of the fact that the Diversified Class and Growth Class were potentially illiquid, despite the fact that NIL had held concerns about the liquidity of the FGMF in March 2021, and had engaged in regular correspondence with Falcon since November 2021 about delays in the processing of withdrawal or redemption requests from those classes.

Removal of the FGMF Classes as investment options

30    Finally, ASIC alleges and NSS admits that its contravention of ss 912A(1)(a) and 912(5A) of the Act continued after the closure of the Diversified Class and Growth Class to further investment through the NSMF and their removal as investment options from the Netwealth Platform on around 28 December 2022. The parties agree that by that date the FGMF no longer held a sufficient rating with an approved research house to remain on the Netwealth Platform, and NIL had developed concerns about the governance and liquidity of the FGMF and its sub-funds and the adequacy of disclosure in the relevant product disclosure statements.

31    NSS admits that it did not inform members with existing investments in the Diversified Class and the Growth Class through the NSMF of the concerns NIL held about the governance of the FGMF or about Falcon’s delays in processing redemption requests.

32    Ultimately, after the FGMF Classes were removed as investment options from the Netwealth Platform, applications to and withdrawals from the FGMF as a whole were frozen on 27 May 2024. The parties agree that as at that date, approximately $100,627,603.48 remained invested by NSMF members in the Diversified Class and the Growth Class.

RELEVANT STATUTORY PROVISIONS AND PRINCIPLES

33    Section 912A(1)(a) of the Act provides that a financial services licensee must do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly.

34    A contravention of s 912A(1)(a) will be a contravention of s 912A(5A) of the Act, which is a civil penalty provision.

35    Under s 1317E of the Act, if the court is satisfied that NIL and/or NSS have contravened s 912A(1)(a) and therefore s 912A(5A), the court must make a declaration of contravention.

36    It is uncontroversial that both NIL and NSS are and were financial services licensees at relevant times during the periods of contravening conduct. Both have admitted that their Australian financial services licence covered dealing in superannuation products and provision of a superannuation trustee service, which are the financial services relevant to the admitted contraventions of s 912A(1)(a).

37    The parties agree as to the relevant principles concerning the interpretation of the standard of “efficiently, honestly and fairly” under s 912A(1)(a) of the Act summarised by Foster J in Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414; 88 ACSR 206 at [69]–[70] as follows (with citations omitted):

(a)    the words “efficiently, honestly and fairly” must be read as a compendious expression, meaning a person who goes about their duties efficiently having regard to the dictates of honesty and fairness, honestly having regard to the dictates of efficiency and fairness, and fairly having regard to the dictates of efficiency and honesty;

(b)    the words “efficiently, honestly and fairly” connote a requirement of competence in providing advice and in complying with relevant statutory obligations, as well as an element not just of even handedness in dealing with clients but a less readily defined concept of sound ethical values and judgment in matters relevant to a client's affairs;

(c)    the word “efficient” refers to a person who performs their duties efficiently, meaning the person is adequate in performance, produces the desired effect and is capable, competent and adequate, and inefficiency may be established by demonstrating that the performance of a licensee’s functions falls short of the reasonable standard of performance by a dealer that the public is entitled to expect;

(d)    it is not necessary to establish dishonesty in the criminal sense: the word “honestly” may comprehend prevention of conduct which is not criminal but which is morally wrong in the commercial sense; and

(e)    the word “honestly” when used in conjunction with the word “fairly” tends to give the flavour of a person who not only is not dishonest, but also a person who is ethically sound.

38    These principles have been endorsed and applied in numerous other cases: see, for example, Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; 336 ALR 209 at [674] (Edelman J) (ASIC v Cassimatis); Australian Securities and Investments Commission v Avestra Asset Management Ltd (in liq) [2017] FCA 497; 348 ALR 525 at [191] (Beach J); Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208; 275 FCR 57 at [505]–[512] (Beach J) (ASIC v AGM Markets); Australian Securities and Investments Commission v RI Advice Group Pty Ltd [2022] FCA 496; 160 ACSR 204 at [30] (Rofe J); Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1422 at [147]–[150] (Downes J); Australian Securities and Investments Commission v Lanterne Fund Services Pty Limited [2024] FCA 353 at [86] (McEvoy J); Australian Securities and Investments Commission v RAMS Financial Group Pty Ltd (Penalty) [2025] FCA 1304 at [102] (Shariff J); Australian Securities and Investments Commission v United Super Pty Ltd [2025] FCA 1453 at [28] (O’Callaghan J) (ASIC v United Super).

39    As Beach J observed in ASIC v AGM Markets (at [512]), a contravention of the “efficiently, honestly and fairly” standard as set out in s 912A(1)(a) of the Act does not depend upon a contravention of a “separately existing legal duty or obligation, whether statutory, fiduciary, common law or otherwise”; rather “[t]he statutory standard itself is the source of the obligation.”. The parties submit, and I accept, that what therefore must be assessed is whether the financial services licensee met “reasonable expectations of performance and reasonable standards of performance”: ASIC v Cassimatis at [674].

40    Where any of the elements of financial services provided by a licensee are outsourced, the obligations under s 912A(1)(a) of the Act are not delegable and ultimate responsibility rests with the licensee: ASIC v United Super at [30].

REMEDIATION BY THE DEFENDANTS

41    On 17 December 2025, NIL and NSS offered to ASIC, and ASIC accepted, the Undertaking in the form annexed to the SAFA which is annexed to these reasons.

42    As has been mentioned, pursuant to the Undertaking NIL and NSS have implemented and executed a compensation scheme for all “affected investors”, defined in the Undertaking as being each person who invested in the FGMF through the NSMF and, as at the date of the Undertaking, continued to have funds invested in the FGMF through the NSMF. This compensation scheme required NSS to pay each affected investor an amount equal to their “net capital amount”, which refers to the total amount deducted from the cash account of the affected investor in order to give effect to an investment direction to acquire FGMF units, less the total amount credited to the affected investor's cash account following a direction to redeem FGMF units, provided that the net capital amount may not be less than zero. The parties jointly submit that although the Undertaking only required such compensation to be paid to affected investors, the same compensation scheme was implemented and executed by NSS for persons who had held an interest in the FGMF but had sold their holdings prior to the date of the Undertaking.

43    I accept that, as described in the Supplementary SAFA, pursuant to the Undertaking 1,080 affected investors have received an aggregate of $100,726,298.10. This, the parties submit, represents an amount equal to 100% of the net capital amount paid by those members to acquire units in the FGMF through the NSMF.

DECLARATIONS OF CONTRAVENTION

44    As has been mentioned, ASIC seeks declarations pursuant to s 1317E(1) of the Act and s 21 of the FCA Act. The defendants have agreed to the form of the declarations.

45    The parties submit and I accept that the court is bound by s 1317E(1) of the Act to make declarations of contravention if declarations have been sought and it is satisfied that a contravention of a civil penalty provision (here, s 912A(5A)) has occurred. The court must be so satisfied on sufficiently cogent evidence, which may include agreed facts and admissions: Australian Securities and Investments Commission v Monarch FX Group Pty Ltd, in the matter of Monarch FX Group Pty Ltd [2014] FCA 1387; 103 ACSR 453 at [64] (Gordon J) (ASIC v Monarch FX); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 at [91] (Dowsett, Greenwood and Wigney JJ) (ABCC v CFMEU).

46    Of course the court is not bound by the parties’ agreement as to the terms or scope of any declarations. It must satisfy itself that the making of the declarations of contravention is appropriate: ABCC v CFMEU at [90]. However, where an agreed position on relief is put forward jointly by the parties — including declaratory relief — it is “highly desirable in practice for the court to accept the parties’ proposal”: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at [58] (French CJ, Kiefel, Bell, Nettle and Gordon JJ).

47    In circumstances where the defendants admit the contravening conduct, having regard to the agreed facts and the admissions which the defendants have made the parties jointly submit that the court should be satisfied on the evidence that:

(a)    NIL and NSS have contravened s 912A(1)(a) of the Act and that the declarations of contravention of s 912A(1)(a) should be made in the terms sought; and

(b)    NIL and NSS have thereby contravened s 912A(5A) of the Act, and a declaration must be made pursuant to s 1317E(1) of the Act.

48    As I have said, I am satisfied that the agreed facts and admissions in the SAFA provide a factual basis for the declarations of contravention of s 912A(1)(a) and therefore s 912A(5A) of the Act.

49    The parties jointly submit that the declarations are appropriately and precisely framed to reflect the essence of NIL and NSS’s contraventions. I accept that this is so.

50    The court has a wide discretionary power to make declarations pursuant to s 21 of the FCA Act. In Forster v Jododex Australia Pty Ltd [1972] HCA 61; 127 CLR 421 (Forster), Gibbs J set out (at 437–438) the requirements that should be satisfied before the discretion is exercised in favour of making a declaration:

(a)    the question must be a real and not a hypothetical or theoretical one;

(b)    the applicant must have a real interest in raising it; and

(c)    there must be a proper contradictor.

51    In relation to the making of declarations of contravention of s 912A(1)(a) under s 21 of the FCA Act, the parties jointly submit that:

(a)    the present proceeding raises a real question about the past conduct of NIL in approving, and NIL and NSS in offering, the FGMF classes as investment options available for selection by NSMF members and ASIC has a real interest in raising that question through these proceedings: Forster at 437–438;

(b)    NIL and NSS are proper contradictors, who have a genuine interest in opposing the relief sought (notwithstanding their consent to the proposed relief): Forster at 437–438; Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [30] (Greenwood, Logan and Yates JJ);

(c)    the making of the declarations has utility and is of public interest, serving multiple functions and identifying failures in NIL and NSS’s processes and systems for due diligence, investment risk and monitoring of investment options; and

(d)    the declarations express the court’s disapproval of NIL and NSS’s conduct, support ASIC’s regulatory interests, and serve a broader purpose of general deterrence by informing other Australian financial services licence holders of the standard of acceptable conduct in providing financial services, including superannuation trustees and trustees of “choice” investment platforms: see ASIC Monarch FX at [63]; ABCC v CFMEU at [93].

52    On the basis of the material before the court, I am satisfied that the requirements set out in Forster are met in this matter and that in all the circumstances the declaratory relief jointly sought by the parties is in the public interest and appropriately serves the promotion of compliance with the regulatory regime.

NO PECUNIARY PENALTY

53    In the particular circumstances of this proceeding, ASIC makes no application for a pecuniary penalty order against either NSS or NIL under s 1317G of the Act. ASIC has had regard to:

(a)    the Undertaking provided and promptly effected by NIL and NSS to pay compensation to affected members;

(b)    the strong public interest in prioritising the prompt return of capital invested by members of APRA regulated superannuation funds;

(c)    NIL and NSS’s early and productive cooperation avoiding contested litigation and demonstrating contrition; and

(d)    the declarations of contravention proposed jointly by the parties.

54    In Australian Securities and Investments Commission v Macquarie Investment Management Limited [2026] FCA 303 at [28], Wheelahan J stated that “[b]ecause no pecuniary penalty is sought by ASIC in what is an adversarial proceeding, no occasion arises for the Court to consider whether a penalty should be imposed, and if so, an appropriate amount.” I respectfully agree with and endorse his Honour’s observations in this regard.

COSTS

55    Pursuant to the Undertaking, the parties have agreed that NIL and NSS should pay ASIC’s costs of the proceeding as agreed or, in the absence of agreement, as taxed. I am satisfied that this is appropriate in all the circumstances and there will be an order in these terms.

Associate:

Dated:    20 August 2026

ANNEXURES

Annexure A – Statement of Agreed Facts and Admissions

Annexure B – Supplementary Statement of Agreed Facts and Admissions