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ASIC cancels Wholesale Fund Manager’s AFSL for failing to comply with compliance obligations

Posted on July 26th, 2016 by Sophie Gerber in AFSL Compliance

glass-1497231_1280Failure to comply with ongoing licensee compliance obligations has led to the Australian Securities and Investments Commission (ASIC) cancelling the Australian Financial Services Licence (AFSL) of a Wholesale Fund.

On 1 June 2016, ASIC cancelled the AFSL of TMK Index Limited (TMX), previously known as Fish Capital Securities Pty Ltd, for failing to meet its ongoing compliance obligations. TMX’s AFSL was cancelled effective 12 May 2016.

Wholesale AFSL holders need to be just as diligent as retail fund managers with complying with their ongoing AFSL obligations, and be aware that they are subject to the same monitoring and scrutiny from ASIC as retail AFSL holders.  ASIC has reminded wholesale fund managers of the importance of complying with their ongoing AFSL obligations, stating that “ASIC takes compliance with these obligations seriously as they are important to ensure we have efficient well-functioning financial markets”.

All AFSL holders are required to comply with a number of ongoing obligations, including requirements relating to:

  • the lodgement of accounts;
  • breach notifications;
  • meeting Net Tangible Asset requirement; and
  • maintaining adequate and competent staffing arrangements.

ASIC has also stated that it will continue to take action against AFSL holders who fail to meet their ongoing obligations, stating that “ASIC can and does hold gatekeepers to account to ensure investors can have confidence in our financial system”.

If you would like more information about compliance with ongoing AFSL obligations that mat apply to you, please contact us.