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13-068MR Securities dealer scales down operations following ASIC review
A Queensland-based securities dealer has downsized its operations after an ASIC review found it had failed to comply with conditions of its Australian financial services (AFS) licence.
ASIC was particularly concerned about the level of supervision of the representatives Clearing & Settlement Services Pty Ltd (CSS) appointed.
Based in Southport, CSS promoted a range of investment education and financial markets trading and modelling tools to investors via a network of more than 35 corporate and individual authorised representatives in Queensland, New South Wales and Victoria.
Following an ASIC review of CSS’ operations in 2012, ASIC found numerous licence compliance issues, in particular:
providing services outside those authorised under the license
publication of promotional and marketing materials by authorised representatives
supervision and monitoring of authorised representatives
breach assessment and reporting processes
complaints assessment and handling, and
general license obligations, including lodgement of statutory forms
As a result of the review, CSS volunteered to wind back its operations, and in February 2013 revoked the authorisations for all but one of its representatives. The former representatives included those who had moved from licensees against whom ASIC had taken action, including Romad Financial Services Pty Ltd (RFS) and International Securities & Derivatives Group (ISDG).
‘Licensees who sublet their licence must have in place adequate compliance and governance standards,’ ASIC Deputy Chairman Belinda Gibson said. ‘This includes being responsible for the conduct of representatives they appoint. It is important they have adequate supervisory arrangements in place to identify and address deficiencies quickly.
‘ASIC’s broader monitoring of securities dealers continues. It’s an area that has been very much on our radar and the industry should be under no illusion that we will continue to undertake surveillances and follow up where we identify deficiencies,’ Ms Gibson added.
ASIC acknowledges CSS’ cooperation in the matter.
ASIC regulates AFS licence holders, including indirect participants such as CSS, known as ‘securities dealers’, under the Corporations Act 2001 and the ASIC Act 2001.