Australian Services and Investments Commission (ASIC) revealed today that it has imposed additional conditions on the Australian financial services (AFS) licence of AxiCorp Financial Services Pty Ltd. The regulator said it placed the additional requirements to ensure AxiCorp has adequate compliance arrangements in place for its OTC derivatives business.
According to the new AFS licence conditions, AxiCrop must appoint an independent expert to conduct a review and assess whether the company has adequate procedures and internal controls in place to ensure compliance with its regulatory obligations. The expert is then required to identify remedial actions and AxiCrop must present a plant to ASIC with the actions it plans to implement.
Another condition that has been added is that AxiCorp must keep a minimum of three full-time compliance staff until 31 December 2022. Until then, the company must not appoint any Corporate Authorised Representatives.
AxiCorp’s licence also requires the company to provide ASIC with attestation from a senior executive within the firm. They must confirm that they are satisfied that AxiCorp has undertaken all necessary remedial actions and that it has in place adequate compliance measures to ensure that it and its representatives comply with financial services laws.
If the attestation is not provided before the deadline, AxiCorp is required to stop onboarding new customers and not charge customers commission or other fees for financial in Australia for as long as the attestation remains outstanding.
ASIC suspended AxiCorp’s AFS licence on 2 January, for four months after finding that the company failed to comply with certain laws including paying client money into an account with an Australian authorised deposit-taking institution and complying with client money reporting rules. The watchdog also discovered that the company failed to lodge product disclosure statement in-use notices with ASIC and to comply with derivative transaction rules and lodge financial statements with ASIC by the due date.
On the same day of the suspension, AxiCorp filed an appeal for a review and stay of ASIC’s decision. The Administrative Appeals Tribunal granted that so the AxiCorp could continue to provide financial services, pending final review of ASIC’s decision.
ASIC and AxiCorp have filed a proposed consent order to the Tribunal, setting aside the suspension which the Tribunal approved on 9 March.
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