𝐭𝐡𝐞 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐚𝐝𝐞𝐪𝐮𝐚𝐭𝐞 𝐜𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐦𝐞𝐚𝐬𝐮𝐫𝐞𝐬
ASIC has cancelled the Australian financial services (AFS) licence of securities dealer Pulse Markets Pty Ltd (Pulse Markets), effective from 11 February 2026. (ASIC Media Release 26-027MR)
The licence was cancelled after ASIC found Pulse Markets had serious and sustained breaches of its duties under s912A of the Corporations Act 2001. These included Pulse’s failure to adequately supervise its corporate authorised representatives (CARs) providing financial services under its AFS licence, increasing the risk they will not comply with financial services laws and put clients at risk of financial loss.
ASIC found that Pulse Markets failed to comply with its obligations, including failure to:
- maintain the competence required to provide the financial services it offered
- take reasonable steps to ensure that its representatives comply with the financial services laws by failing to:
– undertake appropriate due diligence prior to the appointment of its CARs;
– take adequate steps to monitor the websites and marketing of its CARs;
– maintain adequate compliance, breach and incident registers;
– and maintain compliance manuals with accurate information about AFS licence authorisations
- ensure adequate resources, including staffing, to provide the financial services covered by the licence and to carry out supervisory arrangements
- prepare and lodge financial statements (being a balance sheet and a profit and loss statement) for financial years 2024 and 2025
- obtain an opinion by a registered company auditor regarding Pulse Market’s compliance with the financial conditions on their licence for the financial years 2024 and 2025
- pay its Industry Funding Levy for the 2023-2024 financial year.
Pulse Markets may apply to the Administrative Review Tribunal (ART) for a review of ASIC’s decision.
Pulse Markets is a Queensland-based securities dealer and has held AFS licence number 220383 since 7 June 2002. The licence authorised Pulse Markets to provide financial product advice, deal in financial products and underwrite an issue of securities, for wholesale clients.
Lessons for General Insurance
It should be noted that Pulse Markets provided financial services to Wholesale clients. This case demonstrates that while firms operating in general insurance providing services to Wholesale Clients (typically Underwriting Agencies offering casualty or specialist general insurance products), don’t have some of the disclosure or other obligations of firms providing services to Retail Clients, they still have obligations that must be documented and managed.
In addition, Authorised Representatives must be subject to due diligence, onboarding and ongoing monitoring and supervision irrespective of whether providing general insurance services or products to Retail or Wholesale Clients.
The case also highlights the importance of documenting compliance measures for both the AFS Licensee and their authorised representatives. The documents should be tailored to the business of the licensee and its authorised representatives (and not an off-the-shelf manual) and be suitable to use in staff training and development and sharing with business partners. Typical documents for small-medium sized insurance brokers, underwriting agencies and TPA’s are:
- Risk and Compliance Manual; and
- Monitoring Program
Insurers and larger firms require a taxonomy of risk and compliance documents (framework) including policies, procedures and processes.
Registers are critical to demonstrate that the firms compliance measures are operating effectively. No registers or blank registers, indicate the documented compliance measures are ‘smoke and mirrors’ – they may be documented but they don’t represent what’s actually happening. There is no oxygenated blood flowing through the system.
Compliance registers are required for recording:
- obligations that apply to the firm together with key control(s) assigned to obligations and including accountability, control testing and action plans to close out identified gaps;
- incidents – including compliance, operational, cyber security, people and financial incidents (and breaches);
- complaints;
- conflicts of interests; and
- training of staff and authorised representatives (recording training of representatives is a regulatory requirement for a licensee).
Contact Compliance Advocacy Solutions if you need assistance with documenting your compliance measures, registers and developing a compliance operating rhythm.
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