Australian Securities and Investments Corporation (ASIC) announced it has cancelled 21st Century Securities Pty Ltd's Australian financial services licence (AFSL) as the Melbourne-based firm had ceased to carry on a financial services business.

ASIC commenced its investigation after an advertisement for the sale of 21 Century's AFSL was placed in the Australian Financial Review. ASIC found prospective purchasers could buy the business and its licence with the buyer bypassing ASIC's licence checks.

In addition, ASIC found that 21st Century had no directors and was not operating a financial services business.

An AFSL may be cancelled if a licensee ceases to carry on a financial services business as such conduct is contrary to the purpose of the financial services licensing regime. While the sale of a licensee is not prohibited, the sale of a licensee to allow the purchaser to bypass the checks ASIC undertakes when issuing a licence undermines this regime.

ASIC also identified that the company failed:

• to lodge an annual profit and loss statement or balance sheet for the 2008 financial year as required by the Corporations Act;
• to notify ASIC of an acceptable key person for the licensee, following the departure of the previous key person or provide ASIC with reasons why no key person was required, as required under the AFSL. (A key person is the person upon whom a licensee is dependent for the licensee's financial services business); and
• to lodge an audit opinion for the 2008 financial year as required under the AFSL.

21st Century has the right to lodge an application with the Administrative Appeals Tribunal for a review of ASIC's decision.

15 October, 2009