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Thursday 4 April 2013

13-071MR ASIC review prompts Halifax to enter into enforceable undertaking

ASIC has accepted an enforceable undertaking (EU) from Halifax Investment Services Ltd (Halifax) following an ASIC surveillance which found deficiencies in their risk management and compliance.

Under the EU, Halifax must appoint an independent consultant to review its business and develop a plan to rectify the deficiencies. The independent expert will report regularly to ASIC over the next year on Halifax’s implementation of the plan.

Over six months last year ASIC’s review of Halifax’s operations found licence compliance issues with its financial services practices, in particular:

  • supervision and monitoring of representatives

  • having technological resources to supervise and monitor representatives

  • oversight of the training and professional standards of representatives

  • breach assessment and reporting processes, complaints assessment and handling

  • processes for the authorisation and publication of marketing materials, and

  • procedures and practices in assessing counterparty risks.

ASIC Deputy Chairman Belinda Gibson said today’s outcome should send a warning to securities dealers about the importance of having adequate compliance and governance standards.

‘The EU requires Halifax to put in place a plan to rectify the deficiencies under the eyes of ASIC and an external independent expert. It requires Halifax to rethink significantly the way it monitors its representatives and to create a culture where compliance is central to the services it provides,’ Ms Gibson said.

If the review identifies a client has been adversely impacted due to Halifax’s conduct, Halifax will be required to consider the circumstances and to remediate the client where appropriate.

ASIC acknowledges Halifax’s cooperation in the matter.

Download the EU

Background

ASIC regulates Australian financial services (AFS) licence holders, including indirect participants such as Halifax, known as ‘securities dealers’, under the Corporations Act 2001 and the ASIC Act 2001.

Halifax is a provider of online platforms, offering clients the ability to trade derivatives, stock, FX and options. It has offices and 47 representatives across Queensland, New South Wales, Victoria and Western Australia. Its AFS licence allows it to provide advice regarding securities, derivatives, basic deposit products, FX contracts and managed investment schemes.

The Halifax EU builds on ASIC’s work to lift standards and closely monitor the conduct of securities dealers. Yesterday ASIC announced Clearing & Settlement Services Pty Ltd (CSS) had downsized its operations after an ASIC review found it had failed to comply with conditions of its AFS licence (refer 13-086MR).

Last updated: 04/04/2013 12:00