Check an investment company or scheme

Checks make the world of difference

Before you invest you should check to see if the investment company is operating legally. Proper checks on an investment company or product can mean the difference between losing your money to a shonky dealer and getting a great deal from a legitimate business.

Here are some simple things you can do as part of your wider checking process.

Check if the company is licensed

A company that sells you investments must hold a licence from ASIC, which controls what kinds of schemes they can sell you. Before you hand over your money to someone asking you to join an investment scheme, ask them: 'Does your company hold an Australian Financial Services (AFS) licence to sell this investment?' If they say they don't hold a licence then they could be operating illegally.

The ASIC Connect Professional Registers will tell you if the company managing your investment holds an AFS licence.

Find out what an AFS Licence means.

You can also check ASIC Connect within the 'organisation and business names search' to see if a scheme is registered with ASIC. Registered schemes will have an Australian Registered Scheme Number (ARSN) that can also be searched.

Investment schemes (generally those with more than 20 members) must be registered with ASIC and comply with obligations under the Corporations Act. Unregistered managed investment schemes do not have the same level of obligations and protections.

Check the list of unlicensed companies

If a company is on our list of unlicensed overseas companies then you should not deal with them.

Check the product disclosure statement

Ask the seller for their product disclosure statement (PDS), which should give enough information about the scheme for you to make an informed decision. Registered schemes must have a PDS.

If you're thinking about investing in listed managed investment products (investments in managed schemes that can be traded on a financial market), then the PDS must be lodged with ASIC. To check, you can search ASIC's OFFERlist database. 

Find out more about managed funds.

Check if they are a registered public company

All Australian companies who manage registered investment schemes must register as a public company (i.e. have Ltd, not Pty Ltd, after their name). Search ASIC Connect within the 'organisation and business names' search to see if they have Ltd (and not Pty Ltd) after their name. 

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Last updated: 03 Sep 2015