By Paulina Duran
SYDNEY (Reuters) – Australia’s corporate regulator said on Monday it had banned Societe Generale’s Australian securities business from signing up new customers until it complies with new licensing conditions related to client money laws.
Pending a declaration from company officials, Societe Generale Securities Australia must refrain from charging brokerage fees in relation to any futures transactions involving client money, the regulator said.
The regulator also ordered the French investment bank’s securities unit to cease taking on new customers if it involved receiving any client money until the attestation is received.
The Australian Securities and Investments Commission (ASIC) imposed the new conditions on the financial services licence of the Societe Generale unit after the regulator in March charged it with criminal offences for allegedly failing to separate its clients’ money in authorised bank accounts.
Societe Generale Securities Australia Pty Ltd said in a statement on Monday it had agreed to the new conditions.
Among other things, the unit must appoint an independent expert to assess its processes to ensure compliance and to identify any deficiencies and plan out any remedial action in a report, the Australian Securities and Investments Commission (ASIC) said in its latest statement.
The additional conditions also require the unit to provide ASIC with attestations from a qualified senior executive and a board member that confirm all remedial actions recommended by the independent expert have been adopted and implemented.
“These restrictions remain for the period the attestation remains outstanding,” the regulator said.
During 2017 and 2018, the securities unit self-reported that it had deposited client money into unauthorised bank accounts between December 2014 and September 2018, which the ASIC had then termed as “serious” and at risk of “undermining investor confidence”.
Regulations say client funds must be deposited with an Australian bank or an account prescribed under specific client money laws, aimed at limiting use of client funds and the circumstances under which they can be withdrawn.
(Reporting by Paulina Duran in Sydney and Rashmi Ashok in Bengaluru; Editing by Muralikumar Anantharaman, Christopher Cushing, Kirsten Donovan)