Claims against security bond of AFS licensee

Previously some AFS licensees had to lodge a security bond with ASIC as part of their licence. This was to help provide compensation to a client that could demonstrate that they had suffered financially because of the failure of the licensee to act adequately and properly.

Now all licensees with retail clients have to hold professional indemnity insurance.

When a current AFS licensee (without professional indemnity insurance) or former AFS licensee wishes to cancel its security bond, it must advertise the fact in the national press. This is to notify any clients that believe they may have a right to compensation so that they can make that claim before the bond is returned to the licensee.

In some limited circumstances, ASIC may also place such an advertisement.

If no claim is notified or known to ASIC within three months after the notice is published, the licensee can apply to us for the bond to be returned.

How to make a claim against the security bond

Within three months after the notice is published, you must send the details of your claim to:

Licensing
Australian Securities and Investments Commission
GPO BOX 9827
Melbourne VIC 3001

If you don’t lodge your claim within this time, the money may be returned to the licensee and you may not be able to pursue your claim through us.

To make a successful claim, you must be able to show that:

• you suffered a financial loss, and

• the loss was a result of a failure on the part of the licensee or its agents or employees to carry out business under the licence "adequately and properly".

Make sure the details of these two points are included in your claim. Its is important to note that claims should relate to instances where these two points are present rather than trade claims that may have been made to an administrator of any of the mentioned companies.

A hearing may need to be held to determine whether compensation can be paid.

Security bonds that we intend to return

There are currently no security bonds that we intend to return.