ASIC Imposes Additional License Conditions on AxiCorp

The Australian Securities and Investments Commission(ASIC) announced on Friday that it has imposed additional conditions on the Australian financial services (AFS) licence of AxiCorp Financial Services Pty Ltd (AxiCorp, AFS licence 318 232). The aim is to ensure that AxiCorp has adequate compliance arrangements in place to comply with obligations related to its over the counter (OTC) derivatives business.

The additional conditions are as follows:

·AxiCorp must appoint an independent expert to conduct a review and assess whether AxiCorp has adequate procedures and internal controls in place to ensure compliance with its regulatory obligations;

·The independent expert is required to identify remedial actions from the review and AxiCorp must provide a plan to ASIC setting out the remedial actions it proposes to implement;

·AxiCorp must maintain a minimum of three equivalent full-time compliance staff until 31 December 2022; and

·AxiCorp must not appoint any Corporate Authorised Representatives until 31 December 2022.

In addition, AxiCorp will also have to provide ASIC with an attestation from a Senior Executive within AxiCorp. The senior executive must confirm they are satisfied that AxiCorp has undertaken all necessary remedial actions and that AxiCorp has in place adequate compliance measures to ensure that it and its representatives comply with financial services laws.

​If the executive attestation is not provided by the time required, AxiCorp is required to take all necessary steps to cease on-boarding new customers and not charge customers commission or other fees for financial services provided by AxiCorp in Australia for as long as the attestation remains outstanding.

Let's recall that, Fazzaco reported that the Australian watchdog suspended Axi's AFSL for four months for deficiencies and systemic failures in the company's compliance regime on January 2, 2020. Then Axi applied to the Administrative Appeals Tribunal for review of ASIC’s suspension decision, as well as for a stay of the suspension decision and for confidentiality orders. The Tribunal granted a stay of the suspension pending final review. Earlier this month, the two parties have reached an agreement on the license conditions.