ASIC moves on Permanent compliance concerns
TheAustralian Securities and Investments Commission(ASIC) has placed extra conditions on the securities dealers’ licences ofPermanent Trustee Companyand Permanent Investment Management (PIM).
The special conditions were imposed after ASIC was notified of several breaches of the Corporations Act, found in the compliance plan audit report of the Permanent Cash Management Fund, and the audit report of the Investor Directed Portfolio Service.
According to ASIC, Permanent Trustee Company and Permanent Investment Management will now be required to work with a compliance consultant, which ASIC says will review and report on actions undertaken to address the breaches.
ASIC says three quarterly reports are to be presented to the watchdog by the consultant and the board reporting on the adequacy of and compliance with the updated policies and procedures.
However Trust, the company formed by the recent merger between Trust Company of Australia and Permanent Trustee Company, says two of the quarterly reviews have already occurred, with a final review to be completed this month.
According to Trust managing director Jonathon Sweeney the companies had notified ASIC of the breaches in 2001, with all necessary remedial action taken early last year.
“ASIC was aware in early 2002 that these issues had been fully addressed,” Sweeney says.
ASIC says the breaches by PIM included a failure to dispatch the annual report and audit report to clients within three months of the financial year end, and the payment of client money into the Permanent Cash Management Fund, which did not comply with the required reconciliation controls.
As found in the audit report, the insufficient bank reconciliation procedures of Permanent Trustee Company resulted in various accounting records not being accurately maintained.
Permanent Trustee Company was also found to have made interest free advances from the Permanent Cash Management Fund to estates and trusts administered by the company, contrary to what is permitted by the prospectus of the fund.
Trust managing director Jonathan Sweeney says an “indepth analysis” conducted by the company found there was no adverse impact on clients.
He says no adverse findings were reported in the first review, delivered to ASIC in November 2002, and no adverse issues are anticipated in the April review, which was submitted in February this year.
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