ASIC suspends NSW broker’s licence

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7 May 2012

The Australian Securities and Investments Commission (ASIC) has suspended the financial services (AFS) licence of Southpoint Insurance Brokers, of Menai, NSW.

The regulator suspended the licence for seven months after a surveillance operation.

It says Southpoint breached its legal obligations and licence conditions by failing to maintain sufficient base level financial requirements to pay all debts as and when they became due, and by failing to hold at least $50,000 in surplus liquid funds when holding client money or property over $100,000.

ASIC also alleges the brokerage failed to operate its trust account in accordance with financial services laws and also failed to lodge financial statements and auditors’ reports by the due date.

“People look to insurance brokers, like other financial service providers, for help in securing services with which they are often unfamiliar, and in doing so place significant trust in those professionals,” ASIC Commissioner Peter Kell said.

“Clients should have confidence that such gatekeepers are fully complying with their legal obligations and the conditions of their AFS licence when dealing with their money.

“As we have done with Southpoint, ASIC will act to remove licensees that fail to meet these requirements.”