ASIC has accepted an enforceable undertaking (EU) from Sydney-based Spring Financial Group Pty Ltd (Spring Financial) following an investigation.

ASIC was particularly concerned about the level of monitoring and supervision of the representatives Spring Financial appointed.

Under the EU, Spring Financial must appoint an independent consultant to review its business and develop a plan to rectify the deficiencies. The independent expert will report regularly to ASIC over the next year on Spring Financial’s implementation of the plan.

The EU follows ASIC’s ongoing investigation into Royale Capital Pty Ltd (Royale), an authorised representative of Spring Financial between October 2011 and June 2012, and other businesses (refer 13-054MR).

ASIC’s investigation into Spring Financial found deficiencies in the group’s compliance measures, including:

• monitoring and supervision of authorised representatives activities to ensure compliance with the financial services law, and

• insufficient training processes and education of authorised representatives.

‘ASIC is continuing to closely scrutinise licensees’ obligations to demonstrate adequate monitoring and supervision and will not hesitate to take action where we find those practices deficient,’ ASIC Acting Chairman Greg Tanzer said.

ASIC acknowledges Spring Financial’s cooperation in the matter.

Download the enforceable undertaking

Background

Spring Financial is authorised under its Australian financial services licence to provide financial product advice and deal in a range of financial products.

A trial date of 14 October 2013 has been set for ASIC’s civil case against a group of individuals and businesses, including Royale, ActiveSuper Pty Ltd, and Craig Gore and his wife Marina Gore, who allegedly used money invested by self-managed super funds for purposes other than which it was intended. The matter will be heard in the Queensland Registry of the Federal Court of Australia (refer 13-054MR).