A proactive ASIC review of Australian financial services (AFS) licensees that failed to lodge audited annual statements has led to ASIC cancelling eight AFS licences.

ASIC reviewed the conduct of 72 AFS licensees operating in the financial advice industry that had failed to lodge their audited annual statements. In addition to cancellations, ASIC has:

• suspended two AFS licences for failure to lodge audited annual statements
• achieved voluntary compliance by 38 AFS licensees who have lodged all outstanding documents, and
• prompted 17 entities to voluntarily cancel their AFS licences as they are no longer operating a financial services business.

In addition, a further seven licensees face possible suspension or cancellation for failing to lodge audited annual statements.

The annual lodgement of audited accounts is an important part of a licensee demonstrating it has adequate financial resources to provide the services covered by its licence and to conduct the business in compliance with the Corporations Act 2001. This includes carrying out supervisory arrangements of its representatives and ensuring there is a financial buffer that reduces the risk of a disorderly wind-up if the business ceases.

Deputy Chairman Peter Kell said, ‘In our experience, failure to comply with reporting obligations is often an indicator of a poor compliance culture. ASIC will take action against licensees that fail to lodge these statements.’

ASIC will continue to contact AFS licensees who have not lodged audited financial statements and take appropriate action if they fail to lodge these statements

Background

ASIC has cancelled eight AFS licences and suspended two for failing to comply with the financial services laws by:

• failing to lodge with ASIC its annual profit and loss statement and balance sheet, together with an auditor’s report for each outstanding year, and
• failing to advise ASIC in writing, within 10 business days, of becoming aware of this significant breach.

The cancelled and suspended licensees are:

Accountants Plus Pty Ltd (AFS licence 273964)
Benchmark Holdings Pty Ltd (AFS licence 240875)
Citywide Investment Services Pty Ltd (AFS licence 336698)
Lateral Thinking Pty Ltd (AFS licence 287975)
Mariner Insurance Pty Ltd (AFS licence 239036)
TIS Logistics Pty Ltd (AFS Licence 286178)
Graeme Bartlett & Associates Pty Ltd (AFS Licence 246223)
Neville Krynauw & Associates Pty Ltd (AFS licence 239188)
[Withdrawn in accordance with ASIC policy - see INFO 152 Public comment on ASIC's regulatory activities]
Southpoint Insurance Brokers Pty Ltd (suspended) (AFS Licence 241736).

ASIC’s website includes further information about AFS licensees and their annual reporting obligations.