ASIC cracks down on AFS licensees

by Julia Corderoy06 May 2015
ASIC has cancelled the AFS licences of four licensees that failed to lodge audited annual statements.

These cancellations are the result of ASIC's most recent proactive review of the conduct of 14 AFS licensees operating in the financial advice industry that had failed to lodge their audited annual statements.

As part of this most recent review, in addition to the cancellations, ASIC has suspended one AFS licence for failing to lodge audited annual statements until the outstanding documents were lodged, achieved voluntary compliance by seven AFS licensees who have lodged all outstanding documents, and prompted two entities to voluntarily cancel their AFS licences because they are no longer operating a financial services business.

The requirement to lodge annual audited accounts is an important one, according to the regulator. Through it, the licensee can demonstrate it has adequate financial resources to provide the services covered by its AFS licence and to conduct its business in compliance with the Corporations Act. 

“In our experience, a licensee's failure to comply with reporting obligations can indicate a poor compliance culture,” ASIC deputy chairman, Peter Kell said.

“After our last review, ASIC warned licensees that their failure to lodge audited annual statements may result in the cancellation or suspension of their AFS licences and we are disappointed that some licensees do not seem to be heeding this message.

“Be clear, ASIC will continue to contact AFS licensees who have not lodged audited financial statements and take action where they fail to lodge these statements.”

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