ASIC warns on transmission of AFSLs
The Australian Securities and Investments Commission (ASIC) has made clear that Australian Financial Services Licences (AFSLs) cannot be sold as part of a transmission of business thereby by-passing regulatory checks and, in doing so, cancelled the licence of a Melbourne-based firm.
The regulator announced that it had cancelled the AFSL of 21st Century Securities Pty Ltd because the company had ceased to carry on a financial services business.
It said it had moved to cancel the licence after investigating a newspaper advertisement for the sale of 21st Century’s AFSL and finding that that prospective purchasers could buy the business and its licence, with the buyer by-passing ASIC’s licensing checks.
ASIC’s announcement said an AFSL could be cancelled if a licensee ceased to carry on a financial services business, as such conduct was contrary to the purpose of the financial services licensing regime.
“While the sale of a licensee is not prohibited, the sale of a licensee to allow the purchaser to bypass the checks ASIC undertakes when issuing a licence undermines this regime,” the regulator said.
AUTHOR
Mike Taylor
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