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Friday 24 March 2017

17-081MR ASIC cancels AFS licences for failing to lodge annual statements

ASIC has cancelled the Australian financial services (AFS) licences of Rebate Financial Services Pty Ltd and Capstone Capital Pty Ltd for failing to comply with a number of their key obligations as financial services licensees.

In particular, ASIC has found that the two licensees failed to:

  • lodge annual financial statements and auditor's reports; and
  • maintain membership with an external dispute resolution (EDR) scheme approved by ASIC.

In addition to the cancellations, ASIC has suspended the AFS licence for KABM Pty Ltd for failing to lodge financial statements and auditor's reports for three consecutive years. ASIC has suspended KABM's licence until 1 May 2017. If KABM does not lodge the required documents by this date, ASIC will consider whether the licence should be cancelled.  

ASIC Deputy Chairman Peter Kell said, '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 lawfully.'

‘Membership of an EDR scheme is also an important requirement for licensees and ASIC will not hesitate to act against those who fail to comply with their responsibilities.’

The cancellation of Capstone Capital and Rebate Financial Services' AFS licence is part of ASIC's ongoing efforts to improve standards across the financial services industry.

Background

ASIC has cancelled two AFS licences and suspended one for failing to comply with financial services laws. The cancelled and suspended licensees are:

  • Capstone Capital Pty Ltd (AFS Licence 225522)
  • Rebate Financial Services Pty Ltd (AFS Licence 247381)
  • KABM Pty Ltd (AFS Licence 335696)

ASIC is empowered to suspend or cancel a licence if the licensee has contravened its obligation to lodge its financial statements or maintain membership with an approved EDR scheme.

The annual lodgment of financial statements and an auditor's report is an important part of an AFS licensee demonstrating it has adequate financial resources to provide the services covered by its licence and to conduct its business in compliance with the Corporations Act 2001.

External dispute resolution gives consumers alternatives to legal proceedings for resolving complaints. Compulsory EDR scheme membership is an important feature of AFS licences.

Editor's note:

On 31 July 2017, the suspension of KABM's Australian Financial Services licence was revoked because, as at that date, KABM had lodged all financial statements and auditor's reports.

Last updated: 10/08/2017 04:26