ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.
19-305MR ASIC cancels AFS licence of Southern Mortgages Ltd
ASIC has cancelled the Australian financial services (AFS) licence of Warrnambool-based responsible entity, Southern Mortgages Ltd (SML), for failure to comply with financial services laws.
The licence cancellation was effective from 24 September 2019.
SML’s sole managed investment scheme, Southern Mortgage Fund ARSN 090 928 448 (the Scheme), commenced winding up in August 2014. As at the date of the licence cancellation, the Scheme is still being wound up.
SML had not complied with a number of important financial services laws over a significant period of time. It did not maintain sufficient financial resources. It failed to lodge its financial statements and audit reports for consecutive years since 30 June 2015.
SML had not complied with its obligation to hold membership of a dispute resolution system.
‘A responsible entity must carry out their duties with reasonable care and diligence. This includes actively monitoring each scheme and, where necessary, winding up a scheme that is no longer viable in a timely manner.
‘ASIC took action to cancel the licence of SML because we formed the view it was not completing the wind up of the Scheme in a timely manner, nor continuing to comply with their core duties as a licensee,’ said ASIC Commissioner Danielle Press.
Under the terms of the licence cancellation, SML can continue limited operations until 24 March 2020 to facilitate the winding up of the Scheme.
SML held AFS licence number 238987 since 31 January 2004.
Under the Corporations Act, ASIC has the power to suspend or cancel an AFS licence if a licensee does not comply with the law, and/or if ASIC has reason to believe a licensee is likely to contravene its legal obligations.
SML has the right to seek a review of ASIC’s decision from the Administrative Appeals Tribunal.