ASIC cancels seven AFSLs
The Australian Securities and Investments Commission (ASIC) cancelled the Australian Financial Services Licences (AFSLs) of seven licensees who did not have adequate professional indemnity insurance.
ASIC revealed it had identified the seven licensees after its review of financial advice licensees who had not requested the release of a security bond that was required under a previous licensing regime.
ASIC identified 98 financial advice licensees that had not sought the return of their security bond, and contacted them to remind them to apply for its release.
"As part of the conditions of release, each licensee had to provide ASIC with evidence of their professional indemnity insurance arrangements," the regulator said.
"Even if licensees were not prepared to apply for the return of their security bond, they were still required to provide evidence to ASIC that they had in place necessary insurance arrangements to comply with Corporations Act requirements."
As a result of these enquiries and related actions, ASIC:
- Cancelled seven AFS licences
- Referred three licensees for further action for failure to have adequate compensation arrangements
- Released, or is in the process of releasing, 54 security bonds
- Prompted 17 entities to voluntarily cancel their AFS licences as they were no longer operating a financial services business, and
- Confirmed the professional indemnity insurance arrangements of the remaining licensees.
ASIC deputy chairman Peter Kell said, "This review has assisted ASIC to remove licensees which are failing to meet their professional indemnity obligations and further, to identify licensees that are no longer active.
"Licensees must ensure they are up-to-date with and actively complying with all current obligations, otherwise, ASIC will take further regulatory action, including cancellation of the AFS licence."
AUTHOR
Nicholas O'Donoghue
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
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.
