The Australian Securities and Investments Commission (ASIC ) announced this Monday that it has suspended the Australian financial services (AFS) license of Halifax Investment Services Pty Ltd until January 10, 2020.
Halifax was an Australian investment management company headquartered in Sydney. It also has a partially-owned subsidiary in New Zealand. As Finance Magnates reported in November, the firm has gone 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,
Under the licence suspension from ASIC, the firm is still able to continue select operations: “to ensure that clients of Halifax continue to have access to an external dispute resolution scheme; to ensure that Halifax continues to be required to have arrangements for compensating retail clients, including the holding of professional indemnity insurance cover; and to allow for the termination of existing arrangements with clients of Halifax.”
Halifax investors expected to be out of pocket
When speaking at a creditors meeting in Sydney, administrator Stewart McCallum said that Halifax had A$211m ($151.5 million) of client funds at the time administrators were appointed on November 23 but only available cash of A$190m-$200m 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.
Stewart McCallum
Source: Ferrier Hodgson
In late December, the administrators sought an extension of 90 days, due to the complicated process and delays due to the Christmas holiday period.
Commenting on the extension, McCallum said: "We don't think that within the existing timeframe we'll be able to give creditors a sufficient picture about what has happened … or know what investors are entitled to or where they might sit between Australia and New Zealand. There are lots of complexities."
