UBS WM Australia Signs Enforceable Undertaking With The ASIC

Vanessa Doctor

27 March 2011

UBS Wealth Management Australia has agreed to an enforceable undertaking with the Australian Securities and Investments Commission after it failed to comply with documentary requirements sought by the regulator, media reports show.

The company had reportedly gone to the ASIC in 2010 to admit that it had not provided statements of advice to 764 of its retail clients who invested structured products. The SOAs would have contained the explanation of the advice given by the advisor to the client, the advisory fee, and the investments recommended. These reportedly happened from January 2006 to March 2010.

"The EU provides a speedy process of redress and compensation for UBS WMA clients who suffered loss because they were not provided with an adequate SOA," Tony D'Aloisio, chairman of the ASIC, was quoted by InvestorDaily as saying.

"It gives the executives and board of UBS WMA a clear timetable within which to make improvements in the conduct of its advice business. It also sends a broader message to the market the the ASIC expects advisors to proper systems in place," he added.

Under the agreement, UBS WMA will have to go through a series of checks and reviews, in place of civil penalty proceedings. According to The Australian, the company had allegedly admitted to eight potential breaches of the Corporations Act.

In addition, the company will pay $30,000 with a promise to pay another fine of as high as $50,000 to cover the regulator's past and future expenses over the matter. UBS WMA will also write to the clients concerned, along with a claim form for any related compensation the company might need to give out. UBS WMA has pledged to give its full cooperation on the proceedings.

The EU applies to the UBS Wealth Management Australia only and does not affect its parent firm, UBS AG, or other companies under the UBS banner.