The Australian Securities and Investments Commission (ASIC) has cancelled The Australian Dealer Group Pty Ltd's (ADG) Australian Financial Services (AFS) licence.

ASIC found that between November 2017 and December 2020, the ADG provided individual advice to consumers about their superannuation, even though it was only authorised to provide general advice. As a result, ADG failed to comply with the legal obligations required when giving personal advice, such as acting in the best interests of the client and providing a statement of advice. As a result of its involvement in this conduct, ADG is suspected of multiple violations of the Financial Services Act.

ASIC: The Australian Dealer Group Financial Services Licence has been cancelled and exemptions for certain offences have been introduced

According to ASIC, the financial services licence was cancelled because ADG failed to comply with its obligations to be effective, honest or fair in the provision of financial services. ADG was found to have the following behaviors:

1, put their own interests above the interests of consumers;

2. Breach of the terms of the Australian Taxation Office (ATO) in conducting a search for lost superannuation;

3. Act without the consent of consumers;

(4) Temporary collection of pension consolidation fees under non-transparent and unfair circumstances; and

5, forcing consumers to sign retirement consolidation agreements over the phone, including not providing time to read the terms and conditions before seeking a deal.

The consequences of this action are that consumers may suffer harm, including loss of insurance as a result of holding superannuation, additional costs and penalties from the ATO for improperly obtaining superannuation.

The ADG has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

Exemptions are introduced for specific violations

ASIC has also announced that it has introduced exemptions for certain breaches of the Companies Act, including serious offences such as market manipulation, insider dealing and dishonesty in the conduct of financial services business.

Under this exemption, individuals who cooperate with others to manipulate markets, engage in insider trading, or engage in dishonest conduct while operating a financial services business may, in certain circumstances, seek immunity from civil penalties and criminal prosecution. ASIC's exemption application only applies to individuals, not companies.

The exemption will strengthen ASIC's enforcement tools to help it identify and take enforcement action against specific market and financial services violations. ASIC will be responsible for granting civil immunity, while the Australian Federal Prosecutor's Office (CDPP) will be responsible for granting criminal immunity, and ASIC will work with CDPP on criminal immunity applications.

Under the policy, only the first person who meets the exemption criteria and reports the misconduct to ASIC before the investigation begins will be granted an exemption.

ASIC Commissioner Sean Hughes said: "ASIC has developed and implemented new tools to combat and detect misconduct in the market. The exemption policy enhances ASIC's ability to identify and respond to breaches in complex markets and financial services.