ASIC accepts EU from City Index Australia
The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from financial services business City Index Australia (CIA).
CIA enables investors to trade over the counter (OTC) derivatives such as contracts for difference and foreign exchange contracts.
The EU followed an ASIC surveillance of the business which found deficiencies in its client money-handling processes.
ASIC’s surveillance also found weaknesses in CIA’s ability to ensure compliance with the requirement to hold surplus liquid funds, weaknesses in change management, inadequate oversight of outsourcing, an ineffective internal audit function, weakness it its controls around public statements, inadequate training and education of staff, and ineffective internal reporting procedures to ensure the timely escalation of issues to senior management.
Despite CIA engaging an independent specialist to review the breaches of its surplus liquid funds requirement and receiving a report on the matter in February 2012, CIA failed to implement the recommendations until the end of January 2013.
The company must appoint an independent expert to review the business and develop a plan to rectify deficiencies. The expert will report to ASIC regularly throughout the next 18 months on CIA’s implementation of the plan.
CIA was also fined twice in October last year over its deficiencies.
The industry was warned late last year that ASIC expects issuers to know and understand their client money-handling obligations and comply with them, ASIC commissioner Greg Tanzer said.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
