Compliance
Compliance Corner - ASIC, Morgan Stanley Wealth Management, Others
The latest compliance issues in wealth management across Asia-Pacific.
ASIC
Financial watchdog ASIC
has required Morgan
Stanley Wealth Management Australia to amend a
false claim of independence that could mislead consumers and
investors.
The claim was made in an ASX announcement released by Praemium Limited on 5 June. The ASX announcement included a quote from MSWMA which described its business as featuring an “independent advice offering”.
Under s923A of the Corporations Act, a person who carries on a financial services business or provides a financial service is prohibited from using the restricted terms “independent”, “impartial” or “unbiased” in relation to the business or service except where the person does not receive commissions, volume-based payments or other gifts or benefits, and operates without any conflicts of interest.
MSWMA accepts volume-based payments and commissions from product issuers in relation to the provision of financial services and advice. MSWMA arranged for a clarifying statement to be published by Praemium Limited in an ASX announcement on 5 July. MSWMA has also taken steps to update its marketing approval process and arrange staff training regarding appropriate descriptions of their products and services.
SFC
The Securities
and Futures Commission (SFC) has banned Fonia Kwok Lai Kwan
from re-entering the industry for 12 months from 25 August 2018
to 24 August 2019 following her conviction for unlicensed asset
management.
The Eastern Magistrates’ Court found that between 2009 and 2015, Kwok, who was the sole proprietor of Finamics Capital Management (Finamics), carried on a business in asset management in the name of Finamics, an entity without an SFC licence.
The clients who Kwok solicited for Finamics agreed to pay Finamics a monthly commission equivalent to 40 per cent to 50 per cent of the net profit generated from its management of their investment portfolios.
In deciding the sanction against Kwok, the SFC considers that her conviction casts serious doubts on her reputation, character and reliability and she is not fit and proper to be a licensed person.