ASIC issues guidance to AFS licensees to protect against share sale fraud
ASIC consults on remaking class orders on application form requirements

ASIC issues guidance to AFS licensees to protect against share sale fraud

June 18, 2019

ASIC has provided guidance for Australian financial service (AFS) licensees about how they can mitigate the risks to their clients and business of share sale fraud.

Share sale fraud refers to the fraudulent activity of a person who is not who they claim to be, selling shares that do not belong to them.

ASIC has identified a rise in the instance of share sale fraud, primarily in connection with issuer-sponsored holdings and is providing guidance in Information Sheet 237 Protecting against share sale fraud (INFO 237) to AFS licensees who may be vulnerable to share sale fraud.

AML - Anti Money Laundering

Specifically, INFO 237 provides guidance in relation to ASIC’s expectations around licensees’ management of:

  • one-off share sales
  • customer due diligence
  • ongoing customer due diligence
  • intermediary clients
  • anti-money laundering and counter-terrorism financing (AML/CTF) training
  • reporting of suspicious matters.

ASIC considers that robust account opening and customer due diligence practices can be effective in preventing fraudulent activity such as share sale fraud.

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