The Australian Securities and Investments Commission (ASIC) has accepted a court-enforceable undertaking from Australian Financial Services (AFS) licensee PKF Melbourne Corporate Pty Ltd.
ASIC conducted an investigation which reviewed records relating to three independent expert report (IER) engagements.
The regulator raised concerns that PKF failed to have documented internal policies and procedures demonstrating compliance with AFS licensee obligations and ASIC’s regulatory guidance, internal policies for the selection and application of valuation methodology. The company also failed to document its assessment of the competence of technical experts or review of their reports, robust processes and procedures for managing conflicts of interest to ensure the absence of any conflicts before and during IER engagements.
The company also failed to have processes in place to review its internal policies and procedures to take account of any changes in law, regulatory guidance or professional practice.
PKF admits that this conduct meant that it did not ensure:
- the financial services covered by its license were provided efficiently, honestly and fairly, and
- had adequate arrangements in place to manage conflicts of interest, in breach of sections 912A(1)(a) and 912A(1)(aa) of the Companies Act 2001.
Under the terms of the undertaking, PKF will stop providing IER until an independent expert completes a review of PKF’s policies and procedures for IER engagements and PKF implements all of the recommendations of that review.
This commitment replaces PKF’s voluntary commitment given to ASIC in March 2024 that it would not accept new IER commitments while ASIC’s investigations were ongoing.