The Australian Securities and Investments Commission (ASIC) has suspended the Australian financial services licence (AFSL) of KP International Group Australia (KP), until 23 September, 2020.
The Sydney-based firm’s licence was suspended because ASIC was concerned the firm had not adequately addressed systemic issues identified by the-then Financial Ombudsman Service (FOS), now the Australian Financial Complaints Authority (AFCA).
The concern was over certain exclusions in KP’s professional indemnity insurance cover which did not meet adequacy requirements.
The FOS identified at least 23 KP clients who were affected by systemic issues and they did not review the relevant client files to determine if they had engaged in misconduct, assess whether remediation was necessary, or take reasonable steps to provide any required remediation.
ASIC determined KP had failed to do everything necessary to ensure the financial services covered by its licence were provided efficiently, honestly and fairly.
ASIC also found that KP’s professional indemnity insurance cover had exclusions that made it inadequate for the licensee’s business and any liabilities arising from potential compensation claims.
KP was required to remain an AFCA member and to obtain adequate professional indemnity insurance during the suspension period.