ASIC revokes licence of Harts subsidiary
Financial planning group Harts Australasia has taken another hit after a subsidiary of the group had its dealers licence revoked by the Australian Securities and Investments Commission (ASIC).
The group, Cardinal Financial Securities Limited, had it license revoked after an ASIC surveillance visit in December of last year. The regulator was concerned the group breached conditions of its licence and did not hold up its responsibilities under law.
According to further investigations by ASIC, Cardinal’s net tangible assets of $5 million had not been maintained and it had not provided an independent consultants report on its Lenda Mortgage scheme. The scheme had also not been registered as a managed investment by the legislative deadline of 30 June 2000.
As part of the investigation ASIC also found the group had not lodged a number of half yearly and annual reports and returns, and some of those lodged occurred outside prescribed periods. ASIC also claims the group did not audit some scheme accounts, failed to send some accounts to unit holders and failed to lodge certain audit report with ASIC as part of the groups legal obligations.
Further to these claims ASIC states the group did not have adequate compliance processes in place.
According to ASIC’s director of financial services regulation Ian Johnston, Cardinal’s breaches of their licence were of such a degree that the regulator was forced to take drastic action.
“Cardinal Financial Services seriously breached a number of their licence conditions, and as demonstrated by this action, ASIC will not hesitate to revoke a licence when the licensee fail to operate as they are required by law,” Johnston says.
Cardinal is currently the responsible entity for five managed investment schemes as well as the manager of a number of prescribed interest schemes.
Its licence revocation comes in the same week its parent group, Harts, was queried by the Australian Stock Exchange over its concerns that it held insufficient funds to continue operations.
The ASX query was the third this year with the first in January and the second in May concerning the groups share price. The ASX were concerned as to whether Harts was meeting the business objectives set out in the prospectus and its current position in relation to fund raising through sale of non-core assets.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
