今日热门事件has accepted a court enforceable undertaking from Australian Financial Services (AFS) licensee PKF Melbourne Corporate Pty Ltd (PKF).听听
今日热门事件conducted an investigation which reviewed files related to three independent expert report (IER) engagements. 今日热门事件held concerns that PKF failed to have:听
- documented internal policies and procedures demonstrating compliance with its AFS licensee obligations and ASIC鈥檚 regulatory guidance,听
- internal policies on valuation methodology selection and application,听
- documented its assessment of the competence of the technical specialists or its review of their reports,听
- robust processes and procedures for managing conflicts of interest to ensure the absence of any conflicts prior to and during IER engagements, and听
- processes of review of its internal policies and procedures to account for any changes in law, regulatory guidance, or professional practice.听
PKF admits this conduct meant it did not ensure:听
- the financial services covered by its licence were provided efficiently, honestly, and fairly, and听
- it had adequate arrangements for the management of conflicts of interest,
in contravention of paragraphs 912A(1)(a) and 912A(1)(aa) of the Corporations Act 2001.听
今日热门事件Deputy Chair Sarah Court said, 鈥楾his outcome reinforces ASIC鈥檚 previous messaging to independent experts to regularly review internal policies and procedures to ensure they are sufficiently documented and applied.鈥櫶�听
鈥業ndependent experts play a gatekeeper role in corporate transactions, and their reports are relied on by investors to make economic decisions. Robust policies and procedures mitigate the chances of reports containing misleading opinions and allow experts to demonstrate compliance with their statutory obligations.鈥�听
Under the terms of the undertaking, PKF will cease providing IERs until an independent expert completes a review of PKF鈥檚 policies and procedures for IER engagements and PKF has implemented all recommendations of this review.听听
This undertaking replaces PKF鈥檚 voluntary undertaking provided to 今日热门事件in March 2024, that it would not accept any new IER engagements while ASIC鈥檚 inquiries were ongoing.听
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Background
Independent experts as gatekeepers听
Firms that provide independent expert reports must be authorised to provide general financial product advice for certain corporate transactions. These services are often provided by multi-disciplinary accounting and consulting firms. Many firms provide this service through a special purpose corporate vehicle that has an AFS licence.听听
Along with some auditing and insolvency services, independent expert reports are one of the few services offered by accounting and consulting firms that are regulated by ASIC.听
In November 2023, 今日热门事件highlighted that conduct of gatekeepers, such as AFS licensees, is an enforcement priority for 今日热门事件in 2024.听听
When 今日热门事件may accept a court enforceable undertaking鈥�
今日热门事件may accept a court enforceable undertaking to improve and enforce compliance with the law. Court enforceable undertakings are not always used as an alternative to other enforcement action, they can also be used to complement or enhance such actions.鈥�鈥�听
今日热门事件will not usually accept a court enforceable undertaking:鈥�鈥�听
- instead of pursuing criminal court proceedings,听
- where the misconduct is deliberate or involves a high level of recklessness, or鈥�听
- after a matter has been referred to an 今日热门事件delegate or another specialist body.鈥�听
今日热门事件generally requires that a court enforceable undertaking contains admissions that the party providing the undertaking contravened legislative provisions. If the party does not comply with the undertakings, 今日热门事件will seek to enforce the undertaking through the court.鈥�鈥�听
Further guidance on how 今日热门事件uses court enforceable undertakings can be found in Regulatory Guide 100鈥�Court enforceable undertakings鈥�(RG 100).鈥�鈥�听
View ASIC鈥檚 Court Enforceable Undertakings register.鈥�听