ASIC warning to AFS licensees about meeting financial reporting obligations

ASIC has reminded all Australian Financial Services (AFS) licensees to lodge their annual financial statements and auditor reports by the due date as required under the Corporations Act 2001.

AFS licensees that fail to meet their obligations before the due date risk regulatory consequences. ASIC Commissioner Sean Hughes said, “Timely lodgement of financial statements and auditor reports with ASIC demonstrates an AFS licensee’s capacity to comply with financial services laws. Yet, we have observed a high rate of non-compliance – a number of licensees seem to be waiting for reminders from ASIC to adhere to this ongoing legal requirement.

“ASIC considers this an indicator of a poor compliance culture. We expect AFS licensees to have adequate policies and procedures in place to ensure they are able to meet their financial reporting obligations. ASIC is continuing to pursue AFS licensees who don’t comply and where appropriate, we will consider taking action to suspend or cancel a licence,” Hughes said.

The company regulator has stated that it expects all AFS licensees to comply with the financial reporting requirements within the specified timeframe. Body corporate AFS licensees that are not disclosing entities, and have a financial year ending 30 June, are required to lodge their financial accounts by 31 October 2019. Limited AFS licensees that do not deal with client money must lodge an annual compliance certificate along with a profit and loss statement and a balance sheet each financial year, also by 31 October 2019.

ASIC has previously contacted a number of AFS licensees that have not met their annual financial reporting requirements and where appropriate, taken action to ensure compliance with the law. Since October 2016, ASIC has suspended nine AFS licences and cancelled 22 AFS licences for failing to lodge their annual financial statements and auditor reports.