The Australian financial regulator has scrapped the licences of four investment and advisory firms for not lodging audited annual statements, a failing that the watchdog says is a serious lapse.

Australia’s financial regulator has scrapped licences of four firms for not lodging audited annual statements, following a review into the behaviour of 14 organisations in the advisory sector.

The Australian Securities and Investments Commission has cancelled the Australian financial services (AFS) licences of four licensees that failed to lodge audited annual statements. The review of the group of firms was announced in July last year.

ASIC also suspended one AFS licence due to a failing to lodge audited annual statements until the outstanding documents were lodged. In other actions, it achieved voluntary compliance by seven AFS licensees who have lodged all outstanding documents. It further prompted two entities to voluntarily cancel their AFS licences because they are no longer operating a financial services business.

The cancelled and suspended licencees are Ken Hart Insurance Brokers Pty Ltd; McDouall Stuart Corporate Finance Pty Ltd; Marshall Lawrence Pty Ltd; Green Stride Investment Management Pty Ltd, and Navigate Funds Management Pty Ltd (suspended 23 December 2014 to 27 February 2015).

The regulator said the requirement to lodge annual audited accounts is important because a licensee can show it has adequate financial means to provide the services covered by its licence and conduct business in compliance with the Corporations Act.