ASIC’s rejection of licence application upheld

The Australian Securities and Investments Commission (ASIC) has had its decision to reject an Australian financial services licence (AFSL) application from an SMSF service provider upheld by the Administrative Appeals Tribunal (AAT).

ASIC’s refusal to grant Superannuation Warehouse Australia (SWA) an AFSL was ratified by the AAT in January on the grounds that the sole director and nominated responsible manager for the organisation, John Preller, did not demonstrate an adequate understanding of the general obligations that apply to a licensee and did not disclose matters the AAT determined to be materially relevant, including not informing the corporate regulator of past legal breaches.

The AAT decision took into account relevant information the ATO provided ASIC about SMSF audits Peller performed and it was considered to be in line with other similar rulings the tribunal has handed down.

“These decisions reinforce the importance of providing full and frank disclosures to ASIC and the weight placed on an applicant’s past conduct in financial services or under other legislation in determining a licence application,” ASIC assessment and intelligence executive director Warren Day said.

“Applicants, and anyone else involved in preparing and lodging applications with ASIC, are on notice that a failure to disclose all relevant information runs the risk of the application being refused.”

Day advised AFSL applicants should view the granting of a licence as a privilege and not a right, and stressed the regulator had the ability to pursue criminal prosecution if false information had been provided to it.

SWA had originally applied for a limited AFSL in April 2014 that would allow it to provide SMSF advice. In June 2016, ASIC refused the application.

The decision to refuse the application was then taken to the AAT in July 2016.

In 2015, ASIC took action against SWA preventing it from advertising the establishment of SMSFs for free. Consequently, SWA was ordered by the Federal Court to pay a $25,000 penalty.

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