The decision by Professional Investment Services (PIS) to enter into an enforceable undertaking (EU) with ASIC will not affect its merger with Centrepoint Alliance (Centrepoint), the group's managing director has said.
PIS managing director Grahame Evans said Centrepoint were aware of the group's lengthy discussions with the corporate regulator ahead of their proposed merger.
"Centrepoint knew we were having ongoing discussions with ASIC," Evans said.
"We put that in the scheme booklet, it was something that was disclosed very early on."
In a statement released to the Australian Securities Exchange earlier this week, Centrepoint acknowledged it knew of the discussions.
"This [EU] is the result of the continued negotiations between PIS and ASIC as outlined in the [Professional Investment Holiding/Centrepoint] merger scheme booklet," the statement said.
"The EU is consistent with [Centrepoint's] pre-merger expectations."
Despite notification in the scheme booklet, Evans could not verify whether shareholders of PIS's parent company, Professional Investment Holdings (PIH), had any knowledge of the potential of an EU before lodging their votes.
"It was in the scheme booklet that it was ongoing discussions and so that was disclosed as much as it could be disclosed at the time," Evans said.
He said the reason behind PIS agreeing to the EU is to find resolution for legacy issues uncovered by ASIC during their reviews of the firm between the years 2006 to 2009.
"Part of the reason it has been four years is that unfortunately ASIC has gone through changes, both structural and people changes, I mean we've dealt with three different groups of people over that time so that's why it has taken that length of time to go through the process," he said.
Evans said the EU will have no impact on clients and minimal impact on the firm's advisers.
PIS anticipate the EU will take 12 months to implement, with an initial implementation plan scheduled for ASIC review in February 2011.
ASIC announced PIS had agreed to an EU earlier this week Monday.
