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Australia watchdog imposes licensing conditions on SocGen securities
[SYDNEY] Societe Generale's Australian securities business faces restrictions on new customers if it does not comply with new licensing conditions related to client money laws, Australia's corporate regulator said on Monday.
The Australian Securities and Investments Commission (ASIC) imposed the new conditions on the financial services licence of the Societe Generale business after charging the business in March with criminal offences over alleged failure to separate clients' money in authorised bank accounts.
If Societe Generale Securities Australia does not comply with the new conditions, the unit would need to refrain from charging brokerage fees in relation to any futures transactions involving client money, the watchdog's statement said on Monday, adding that the French investment bank's securities unit must cease taking on new customers if it involves receipt of client money.
ASIC said the Australian business must appoint an independent expert to assess its processes, identify deficiencies and plan remedial action, with attestations from a qualified senior executive and board member confirming that any recommended remedial action has been adopted and implemented.
Societe Generale Securities Australia Pty Ltd said in a statement that it had agreed to the new conditions.
However, SocGen spokesperson based in Hong Kong said the business was operating normally.
"Our operations in Australia are running as usual and there is no impact on Societe Generale's operations or on the level of service to its clients," he said.
During 2017 and 2018, the securities unit self-reported that it had deposited client money in unauthorised bank accounts between December 2014 and September 2018, which the regulator had then termed as "serious" and at risk of "undermining investor confidence".
The regulations require client money to be deposited with an Australian bank or an account prescribed under specific client money laws. This is aimed at limiting use of client funds and the circumstances under which they can be withdrawn.