Commonwealth Bank-owned retail brokerage CommSec has entered into an enforceable undertaking with ASIC after weaknesses were found with its money-handling procedures.
In a statement issued yesterday, the corporate regulator announced it had accepted an EU offer from CBA entities CommSec and the Australian Investment Exchange.
Under the terms of the agreement, the two CBA Group entities must appoint an independent expert to review their client money-handling procedures and put processes in place to rectify deficiencies.
The EU follows “weaknesses” identified by ASIC regarding the money-handling arrangements of the two companies.
“Those weaknesses related to withdrawing client money from trust accounts without the required written authorisations and failing to separate client money from CommSec's and Ausiex’s money,” said an ASIC statement.
“ASIC considers it appropriate to seek the view of an independent expert to evaluate the controls and processes of CommSec and [Australian Investment Exchange] in relation to the handling of client money.”
The statement emphasises the need for AFSL holders to “keep client money separate from their own” in order to safeguard retail investors.
Both CommSec – Australia’s largest retail brokerage – and the Australian Investment Exchange (Ausiex) completed a remediation program in late 2012.
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