Unregistered  MIS

• On 22 December 2010 ASIC (as Applicant) filed an application in the Federal Court of Australia (Brisbane) to start proceedings against Storm Financial Limited (Receiver and Manager Appointed)(In Liquidation)(“Storm”), Commonwealth Bank of Australia Limited (“CBA”), Bank of Queensland Limited (“BoQ”) and Macquarie Bank Limited (“Macquarie”) (as Respondents). The outcome ASIC is seeking from this proceeding is an order from the Court that an unregistered managed investment scheme was operated by Storm and that the CBA, BoQ and Macquarie were knowingly involved in the operation of that scheme.In this proceeding ASIC alleges that Storm operated a managed investment scheme (MIS) that should have been registered under the Corporations Act 2001 and was not registered.Generally in a MIS:people are brought together to contribute money to get an interest in the scheme;

• money is pooled together with other investors or used in a common enterprise; and

• a 'responsible entity' operates the scheme. Investors do not have day to day control over the operation of the scheme.

An MIS must generally be registered with ASIC if it has more than 20 members or is promoted by someone who is in the business of promoting investment schemes.

If the Court finds that any of the CBA, BoQ and Macquarie were knowingly concerned in the operation of an unregistered managed investment scheme by Storm, that judgment will lay the foundation for subsequent claims for compensation against those banks.