The three entities are the US-domiciled Barclays Capital Incorporated (BCI), Hong Kong-based Barclays Capital Asia Limited (BCAL) and the UK-based Barclays Capital Securities Limited (BCSL).
The enforceable undertaking was accepted by ASIC “following concerns about significant breaches of the conditions of the ASIC class order licensing exemptions relied on by the Barclays entities”, which included a failure to notify ASIC of breaches within the required timeframe.
“The Barclays entities failed to disclose to clients that they were exempt from holding an Australian Financial Services Licence (AFSL) and are regulated by the relevant overseas regulatory authority,” the regulator said.
“BCI and BCAL are not able to demonstrate that the requisite disclosure was made to clients since first commencing reliance on the ASIC class order licensing exemption, in 2004 and 2006 respectively. BCSL is not able to demonstrate that the requisite disclosure to clients had been made across a 10-year period from 2004 to 2014.”
ASIC said it was “particularly concerned” that the three entities failed to notify ASIC of their breaches within the allotted 15-day time-frame, and consequently excluded themselves from an ASIC class order licensing exemption.
“Foreign financial services providers relying on a class order licensing exemption must have effective and enduring measures to ensure compliance with the conditions set out in these instruments, including the fundamental obligations relating to disclosure and reporting,” said ASIC commissioner Cathie Armour.
“Entities that fail to self-report a breach of their obligations to ASIC within the required time will be subject to automatic and indefinite exclusion from the licensing exemption provided by these instruments.”
The terms of the enforceable undertaking stipulate that the three Barclays entities must, among other things, engage an ASIC approved independent expert to review and test their compliance frameworks and report any deficiencies.
The entities will also contribute $500,000 to the Ethics Centre “for research and development into the provision of financial services to Australian clients”, the regulator said.
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