The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from Macquarie Equities Limited (MEL) following a surveillance which the regulator says "found some recurring compliance deficiencies by and in the supervision of MEL's advisers".
The regulator said the enforceable undertaking followed surveillance started in December 2011, which reviewed the company's compliance systems and a significant number of client files.
The ASIC announcement said MEL had "failed to address recurring compliance deficiencies that involved a significant number of its advisers".
It said these deficiencies were initially identified by MEL's own client file reviews dating back to 2008.
It said that, specifically, the deficiencies included instances of:
- client files not containing statements of advice
- advisers failing to demonstrate reasonable basis for advice provided to the client
- poor client records and lack of detail contained in advice documents
- lack of supporting documentation on files to determine if there was a reasonable basis for the advice provided to the client, and
- failing to provide sufficient evidence that clients were sophisticated investors.
ASIC's review found these deficiencies, which were not reported to ASIC, to be serious and that any remediation initiatives attempted by MEL over a four-year period had been ineffective.
The ASIC announcement said MEL had agreed to a review of its Macquarie Private Wealth business, including its licence risk and operating model and systems and its legal and regulatory obligations.
