ASIC suspends licence of Investors Exchange Limited
The Australian Securities and Investments Commission (ASIC) today announces that it has suspended the Australian financial services (AFS) licence of Queensland-based financial services provider Investors Exchange Limited (IEL). The suspension is for a period of six weeks.
IEL is the responsible entity of Investors Exchange Fund and Investors Exchange Investment Fund. IEL also previously operated Dean Capital Property Trust No. 1.
The licence was suspended because IEL failed to comply with financial services laws and maintain competence to provide the financial services covered by its AFS licence. In particular, IEL:
- failed to lodge its annual financial statements and auditor reports by the requisite date for the financial years ending 2014, 2016, 2017, 2018 and 2019;
- failed to lodge the compliance plan auditor’s reports for Investors Exchange Investment Fund by the requisite date in 2014 and 2016, and for both Schemes by the requisite date in 2017, 2018 and 2019; and
- failed to comply with the compliance plan for Dean Capital Property Trust No. 1 in 2012; and
- issued defective product disclosure documents in 2018 and 2019.
The suspension will allow IEL time to review its competence and take steps to ensure compliance with its obligations as an AFS licensee. ASIC has used its power under s915H of the Corporations Act to allow IEL to provide financial services that are reasonably necessary for the day-to-day operation of the Schemes while the suspension is in place. During the suspension, IEL cannot issue new interests in the Schemes. IEL is also specifically prohibited from:
- granting any further security over the existing assets of the Schemes; and
- offering redemption of interests in the Schemes unless this is offered equally to all Scheme members.
IEL has the right to seek a review of ASIC’s decision at the Administrative Appeals Tribunal.
This is yet another decisive move by ASIC when it comes to supervising AFS licensees. In January, for instance, the regulator cancelled the AFS licence of Halifax Investment Services Pty Limited. The move is not unexpected as was placed into liquidation about two years ago. The cancellation of the AFS license took effect from January 8, 2021, but the Halifax licence to continue on a limited basis until January 7, 2022.