The Australian Securities and Investments Commission (ASIC) today announced the cancellation of two Australian financial services (AFS) licences – of Jels Financial Group Pty Ltd and Selectinvest Pty Ltd.

There is no relationship between the actions regarding the two firms, except that ASIC has taken administrative action.

ASIC cancelled Jels’ licence because the firm failed to demonstrate that it had the competence or resources to provide financial services as required under its licence.

Under the terms of its AFS licence, Jels was required to have a ‘key person’. Following the death of its key person, Jels failed to appoint a new key person. Jels’ sole corporate authorised representative was also insolvent.

Jels also failed to lodge its audited accounts for the 2017-19 financial years.

Regarding Selectinvest Pty Ltd, ASIC explains that it cancelled the firm’s licence because it failed to maintain its external dispute resolution membership with the Australian Financial Complaints Authority (AFCA), and had failed to lodge its annual financial and audit reports since 2017.

Under the Corporations Act, ASIC may suspend or cancel an AFS licence if the licensee fails to meet its obligations under s912A. This includes the obligation to hold membership of a dispute resolution system.

AFS licensees must lodge their financial statements and auditor’s reports annually. Licensees must do this to demonstrate they have the financial resources to provide the services covered by their licence and to conduct their business lawfully.

ASIC expects AFS licensees to do all things necessary to meet their obligations under financial services laws, comply with their licence conditions, and ensure that the financial services covered by the licence are provided efficiency, honestly and fairly.

The licensee may apply to the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision.

ASIC has been very stringent when it comes to the oversight of AFS licensees. The regulator cancelled the AFS licenses of retail FX broker Union Standard International Group Pty Ltd, operating as USGFX, in September 2020.