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ASIC

SMSF firm loses appeal for AFSL

The Administrative Appeals Tribunal (AAT) has affirmed the corporate regulator’s decision to refuse to grant a limited Australian financial services licence (AFSL) to a company that wanted to provide financial product advice in relation to SMSFs.

On 25 June 2016, S & A Chalhoub Nominees applied for a limited AFSL to provide financial product advice.

After assessing the application and providing the applicant with a right to make submissions and be heard, an Australian Securities and Investments Commission (ASIC) delegate determined the application be refused on 18 December 2017.

Chalhoub Nominees appealed the ASIC decision to the AAT on 7 February 2018.

The AAT affirmed ASIC’s decision on 4 February 2019 on the grounds the firm’s professional indemnity insurance was inadequate and that director and nominated responsible manager Akram El-Fahkri could not meet the knowledge requirements because he had not completed the relevant training.

As such, the tribunal could not be satisfied Chalhoub Nominees would do all things necessary to ensure the financial services proposed to be covered by the AFSL would be provided efficiently, honestly and fairly.

ASIC assessment and intelligence executive director Warren Day said: “This is the third instance in as many months where the AAT has affirmed ASIC’s refusal to grant a limited AFS licence on the basis that the applicants did not adequately meet requirements.

“We stand by our assessment process and encourage applicants to ensure they fully understand and can demonstrate their ability to comply with the responsibilities that come with holding a limited licence.”

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