Australian financial regulator imposes additional conditions on IOOF unit

(Reuters) – Australia’s financial regulator said on Monday it has imposed additional license conditions on the investment services unit of wealth manager IOOF Holdings Ltd (AX:).

The Australian Securities and Investments Commission (ASIC)said the extra conditions on IOOF Investment Services Ltd related to governance, structure and compliance arrangements.

The changes were part of a broader restructure of the IOOF group, ASIC said, and took into account concerns highlighted by a powerful government-backed inquiry into the financial services sector, which concluded earlier this year.

Among the new conditions is a requirement that IOOF Investment Services appoint a majority of independent directors to its board.

IOOF, Australia’s second largest wealth manager, said it had already started implementing the changes.

IOOF’s shareholders launched a class action lawsuit in the wake of the Royal Commission inquiry, alleging the company engaged in deceptive conduct and breached stock market disclosure obligations. IOOF has said the case, which is ongoing, is without foundation.

IOOF recently won a separate case brought by the Australian Prudential (LON:) Regulation Authority (APRA) to disqualify five top IOOF executives for failing to act in customers’ interests by breaching pension laws.

Chief Executive Christopher Kelaher left the company by “mutual agreement” in July amid the restructure.

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