ASIC annual report outlines enforcements
The Australian Securities and Investments Commission (ASIC)'s 2011/12 annual report has outlined the amount of surveillance and enforcement action the regulator completed in the financial advice sector in the past year.
In the 2011/12 financial year, under the theme of "confident and informed investors and financial consumers", ASIC completed 750 "high-intensity surveillances" which included the financial adviser shadow shop, as well as reviews of investment banks and exchange-traded fund issuers.
Under this area of priority, the regulator completed 133 civil litigation actions, 118 investigations, and 14 criminal proceedings. It secured 13 criminal convictions and 10 imprisonments, according to its report.
ASIC also highlighted the settlement agreement with the Commonwealth Bank regarding Storm Financial, which brought the total compensation made available by the bank to approximately $268 million.
These figures don't include the area of financial markets, where there were a further 700 surveillances of market operators and other entities, and 46 civil litigation actions.
ASIC was also active in the area of registration and licensing, primarily of credit providers, and investigated 116 entities and disqualified or removed 84 directors.
In terms of funding, ASIC raised $664 million in fees and charges, up 7 per cent on the previous year. Expenses were steady at $384 million, $1 million less than the previous year.
Throughout 2011/12 ASIC's risk-based surveillance of financial advice focused on licensees that rapidly grew by acquiring other financial advice businesses, as well as quality of advice and managed discretionary accounts.
As a result of this work, ASIC said it reviewed approximately 579 pieces of financial advice, banned six advisers, imposed licence conditions on three licensees, and cancelled or suspended six Australian financial services.
Reasons for cancellation included failure to remain a member of an external dispute resolution scheme, non-lodgement of financial accounts and ceasing to operate a financial services business.
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