ASIC Places New Licence Conditions on Societe Generale

Societe Generale’s Australian securities business faces restrictions on new customers until it complies with new licensing conditions related to client money laws, Australia’s regulator ASIC said today.

June 15 2020 | AtoZ Markets – The Australian Securities and Investments Commission (ASIC) announced this Monday that it has imposed additional conditions on Societe Generale Securities Australia Pty Ltd’s Australian financial services (AFS) licence.

What do the new conditions mean for Societe Generale’s Australian securities?

The new conditions mean that Societe General Securities Australia must appoint an independent expert to assess and test its controls. They will also test their systems and processes to ensure compliance with the client money requirements of the Corporations Act 2001.

The independent expert will be responsible for identifying any deficiencies within the company regarding compliance. If they find any deficiency, they should set out any remedial action in a report provided to both ASIC and Societe General Securities Australia.

“The additional conditions also require SGSAPL to provide ASIC with attestations from a qualified SGSAPL senior executive and a SGSAPL board member that confirm all remedial actions recommended by the independent expert have been adopted and implemented,” ASIC said today in its statement.

If attestations are not provided, SGSAPL must:

  • cease on-boarding new customers if the on-boarding involves SGSAPL receiving client money from or for the benefit of the customer; and
  • refrain from charging brokerage fees in relation to any futures transactions executed by SGSAPL to the extent that the transactions involve SGSAPL receiving client money in Australia.

Why ASIC placed new licence conditions on Societe Generale?

ASIC has also imposed additional conditions to ensure the company’s compliance with client money regulations. The need for these additional conditions stems from SGSAPL’s report to ASIC. Moreover the report states that it had deposited client money into unauthorized bank accounts between December 2014 and September 2018.

The regulations require companies to deposit client money with an Australian bank. Funds must also be deposited in an account prescribed by client money regulations. The aim is to limit the use of client funds and the circumstances under which they can be withdrawn.

Societe Generale Securities Australia is a financial services provider in equity derivative sales, prime services, and clearing. It also offers over the counter (OTC) derivatives and ASX24 futures and options, among other financial products. Its clients are wholesale clients, which means – financial institutions, hedge funds, asset managers, and corporate clients.

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