The Australian Securities and Investments Commission (ASIC) announced this Tuesday that it has extended the suspension of the Australian financial services (AFS) license of Halifax Investment Services Pty Ltd.
The Aussie regulator has extended the suspension until January 8, 2021, effective from December 18, 2019. The suspension was previously set to expire on January 10, this year.
Halifax was an Australian investment management company headquartered in Sydney. It also has a partially-owned subsidiary in New Zealand. As Finance Magnates reported, the firm went into administration back in November of 2018.
According to the watchdog, the suspension only remains in place in order to ensure that clients of Halifax have continued access to an external dispute resolution scheme, the statement released today said.
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Furthermore, ASIC has highlighted that the extension was also implemented so that the investment management company will need to have arrangements for compensating its retail clients, including the holding of professional indemnity insurance cover, and to give the company time to properly terminate existing arrangements with clients.
Background on Halifax
ASIC first suspended the AFS license of Halifax almost a year ago. Following the company entering into administration, on November 23, 2018, three joint voluntary administrators were appointed to Halifax – Morgan Kelly, Stewart McCallum, and Phil Quinlan, of Ferrier Hodgson, a firm that specializes in corporate recovery and advisory.
When speaking at a creditors meeting in Sydney, administrator Stewart McCallum said that Halifax had A$211 million ($151.5 million) of client funds at the time administrators were appointed on November 23 but only available cash of A$190 million-$200 million to meet those investments, a report from the New Zealand Herald said.
Specifically, investors in the collapsed derivatives trader could be looking at a loss of between A$10-20 million, administrators said. Furthermore, it could be years until they have their claims resolved. McCallum did not give any reasons for the shortfall.