The Australian Securities and Investments Commission (ASIC) has suspended the Australian financial services licence (AFSL) of a Queensland-based investment manager until the end of February after it found a failure to lodge annual statements and auditor reports on time for five years.
The corporate regulator stated it had suspended the AFSL of Investors Exchange Limited (IEL) for a period of six weeks from 15 January for failing to lodge documents on time for a number of schemes for which IEL was the responsible entity.
These schemes were the Investors Exchange Fund and Investors Exchange Investment Fund. IEL also previously operated the SMSF Invest Property Fund, formerly known as the Dean Capital Property Trust No 1, between 9 August 2006 and 18 December 2012, under a previous version of its AFSL.
ASIC stated the reason for the suspension was because IEL failed to comply with financial services laws and maintain competence to provide the financial services covered by its AFSL, and in particular failed to lodge its annual financial statements and auditor reports by the required date for the financial years ending 2014, 2016, 2017, 2018 and 2019.
It also failed to lodge the compliance plan auditor’s reports for the Investors Exchange Investment Fund by the required date in 2014 and 2016, and for both schemes by the requisite date in 2017, 2018 and 2019.
Additionally, it failed to comply with the compliance plan for the Dean Capital Property Trust No 1 in 2012 and issued defective product disclosure documents in 2018 and 2019 related to investments in a range of cryptocurrency assets and units in an investment trust.
“The suspension will allow IEL time to review its competence and take steps to ensure compliance with its obligations as an AFS licensee,” ASIC said.
“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.
