Australian financial services licensee Kalkine Pty Limited must appoint an independent compliance consultant to address ASIC concerns that Kalkine's customer service representatives were giving unlicensed advice.
New licence conditions have been imposed on Kalkine's Australian financial services (AFS) licence to ensure compliance with its obligations as an AFS licensee. These conditions require Kalkine to engage a consultant to review, assess and report to ASIC whether Kalkine's interactions with its customers are compliant and its supervision mechanisms are adequate.
Where shortfalls are identified, the independent compliance consultant will make recommendations to address the deficiencies which must be implemented by Kalkine.
ASIC Deputy Chair Sarah Court said, 'AFS licensees are responsible for the conduct of their representatives and must have adequate supervision arrangements in place to ensure their representatives comply with the law when engaging with customers.
'As a result of our investigation we remain concerned that Kalkine fell short in meeting its obligations, leading ASIC to take the significant step of imposing new licence conditions. Kalkine will now undergo an external review to ensure it acts lawfully and within the scope of its licence'.
ASIC had concerns that:
- Kalkine's representatives, who are based in India, may have provided personal advice as part of the sale of subscription services when Kalkine's AFS licence only authorised it to provide general financial product advice,
- Kalkine's representatives may have misrepresented to customers the kind of advice being given, by qualifying this as general advice but leaving customers with the impression that the advice was directed to their own personal circumstances,
- Kalkine failed to do all things necessary to ensure that the financial services covered by its AFS licence were provided efficiently, honestly and fairly including but not limited to ensuring the advice being given by its representatives was appropriate and within the scope of its licence, and
- Kalkine's processes to ensure that its representatives were complying with the law when interacting with consumers were inadequate.
Kalkine agreed to the new licence conditions being imposed.
Background
Kalkine is a Sydney-based financial services group which provides equity research reports through a subscription service available on its website. It has held AFS licence 425376 since 11 September 2012, allowing it to provide general advice only.
ASIC's Moneysmart website provides useful information for consumers about general and personal financial advice.
