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
Recommended for you
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
Michael McCorry, chief investment officer at BlackRock Australia, has detailed how investors are reconsidering their 60/40 portfolios as macro uncertainty highlight the benefits of liquid alternatives.
Having reset its market focus to high-net-worth advisers, Praemium’s administration solution has been selected by Bell Potter in a deal that increases the platform's funds under administration by $6 billion.
High transition rates from financial advisers have helped Netwealth’s funds under administration rise by $3.7 billion in the fourth quarter of FY25.
