ASIC and the Australian Securities Exchange (ASX) will closely monitor mutual fund and portfolio managers who improve the value of their holdings through the strategy of ‘window dressing’.

Window dressing is a deliberate strategy of price manipulation near the year or quarter end to improve the appearance of portfolio/fund performance before presenting information to clients or shareholders.

‘Window dressing distorts a portfolio valuation at a time that may benefit a fund manager to the detriment of current and potential unit holders. Investors may not only be looking at their fund’s performance through rose coloured glasses, they may also be paying higher performance fees than are necessary’, said ASIC Deputy Chairman, Ms Belinda Gibson.

Ms Gibson said stock brokers and indirect market participants should be wary of clients placing orders close to the close of business on 30 June which may seek to set a closing price for a security higher than would otherwise be the case.

ASIC’s real time surveillance system, SMARTs, is already in place and on 30 June this year both the ASIC and ASX surveillance teams will be monitoring end of financial year trading and exchanging notes.

‘This is great opportunity to road test our new system’, Ms Gibson said.

Further details are available at ASIC.