Asiasons unit's CMS licence lapses
Securities dealing subsidiary fails to meet certain financial ratio requirements; may be subject to MAS sanctions
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Securities dealing subsidiary fails to meet certain financial ratio requirements; may be subject to MAS sanctions
By KENNETH LIM
24 December 2011
The securities dealing unit of Asiasons WFG Financial has found itself in trouble over lapses under regulations governing financial and margin requirements for holders of capital markets services (CMS) licences.
In an announcement yesterday clarifying the circumstances leading to Asiasons WFG Financial's share trading halt since Tuesday, the mainboard-listed company said that its wholly owned unit, Asiasons WFG Securities Pte Ltd (AWFGS), has failed to maintain certain financial ratios above prescribed levels.
'In the event that such financial ratios fall below such prescribed levels, AWFGS is required to immediately notify the Monetary Authority of Singapore (MAS), and if such a fall . . . should subsist beyond the relevant period prescribed . . . the CMS licence of AWFGS will lapse,' Asiasons said, adding: 'It has come to the attention of the board that such financial ratios have not been maintained by AWFGS beyond the relevant period.' Asiasons did not specify which capital requirements were not met. Representatives for the company could not be contacted for comment.
The MAS has confirmed that the CMS licence of AWFGS has lapsed due to the maintenance lapses, Asiasons said in its announcement, adding that AWFGS has ceased all business operations with immediate effect.
The subsidiary, which is conducting a full internal inquiry into the lapses, may be subject to sanctions by the MAS, Asiasons said.
Asiason said that its other businesses - including private equity, exempt fund management, pre-IPO consultancy and corporate finance advisory - are not subject to any sanctions and will continue to operate as normal.
The affected securities business was loss-making for the 11 months ended November 2011, and the lapsing of the licence is not expected to have a material adverse impact on Asiasons' group results, the company said.
Asiasons was formerly known as Westcomb Financial Group.