ASIC warns AFS licensees to lodge financial statements and auditor’s reports on time 

ASIC has been pursuing Australian Financial Services (AFS) licensees that have failed to meet their obligation to lodge their annual financial statements and auditor’s reports with ASIC within the specified timeframe.

Licensees with a financial year ending 30 June are required to lodge the profit and loss statement and the balance sheet by 31 October of the relevant year.

Since November 2015, ASIC has cancelled three AFS advice licences and suspended a further two for failing to lodge annual financial statements and auditor’s reports.

Deputy Chair Peter Kell said, ‘Licensees are required to lodge financial statements with ASIC to demonstrate their capacity to provide financial services. Failure to comply with reporting obligations can be an indicator of broader compliance concerns.’

‘We are disappointed that some licensees have not heeded the message that their failure to lodge audited financial statements may result in the cancellation of their AFS licence. We continue to focus on this obligation and will take further action where licensees do not comply,’ Mr Kell said.

Background

ASIC has contacted AFS licensees who have not lodged audited financial statements and taken appropriate action if they fail to subsequently lodge these statements. Outcomes and actions stemming from the financial advisers licensee non-lodgment project, for the period November 2015 until September 2016, include:

• In February 2016, ASIC suspended Traders4Traders Pty Ltd for three months. ASIC later lifted the three-month AFS licence suspension after the company lodged all of its outstanding financial statements and auditor reports.
• In March 2016, Allegianz Pty Ltd was suspended for six months. ASIC cancelled their AFS licence in September 2016 after they failed to lodge outstanding financial statements and auditor reports.
• In May 2016, Winley Insurance Group Pty Ltd’s AFS licence was cancelled for failing to lodge financial statements and auditor reports.
• In June 2016, Etern Wisdom Global Pty Ltd and Edwards Benefits Advisors Pty Ltd had their AFS licence cancelled for failing to lodge financial statements and auditor reports.

ASIC has also taken action where this key obligation has not been complied with by wholesale fund managers and responsible entities.

• In September 2016, Lotus Securities Ltd had their AFS licence cancelled for failing to meet the responsibilities of a financial services licensee, including lodging its financial reports; complying with financial resource requirements; complying with a Notice issued by ASIC; maintaining membership of an approved external dispute resolution scheme and notifying ASIC of significant breaches within 10 days.
• In June 2016, Ergo Capital Pty Ltd had their AFS licence cancelled for failing to comply with the obligations of a financial services licensee, including lodgement of financial statements; financial resource requirements; failing to notify ASIC of significant breaches within 10 days and not maintaining the competence to provide financial services.

Source: ASIC

---