ob体育 has cancelled Melbourne based retail OTC derivative issuer, Berndale Capital Securities Pty Ltd鈥檚 (Berndale) Australian Financial Services (AFS) licence.
ob体育 has also banned Stavro D鈥橝more, of Middle Park, Victoria, a former director of Berndale, from providing financial services for a period of six years. Mr D鈥橝more was the sole responsible manager and key person on the AFS licence.
Following an administrative hearing, ob体育 found that Berndale:
- failed to take聽reasonable steps to ensure that its representative complied with financial聽services laws;
- failed to have adequate聽financial and human resources;
- failed to maintain an聽appropriate internal dispute resolution system;
- failed to provide聽financial services efficiently, honestly and fairly;
- failed to comply with the client money reporting requirements;
- failed to lodge annual聽financial statements, and audit reports; and
- is likely to contravene its general obligations as an AFS licensee.
ob体育 also found Mr D鈥橝more:
- was involved in contraventions of financial services聽laws by Berndale;
- is not adequately trained, or is not competent, to聽provide financial services; and
- is likely to contravene a financial services law.
鈥楢FS licensees must ensure that they comply with their reporting, competence and resourcing obligations. If an AFS licensee chooses to allow other entities to operate under its license, ob体育 expects that the licensee will ensure that the representatives are not providing unlicensed financial services and are properly monitored. ob体育 will take decisive regulatory action to address this type of misconduct to prevent investor harm鈥�, ob体育 Commissioner Cathie Armour said.
To minimise the impact of the cancellation on past and current clients of Berndale, the cancellation will be subject to a specification that the AFS licence continues until 20 December 2018 for the purpose of finalising existing client trading accounts.
Further, Berndale鈥檚 AFS Licence continues until 23 May 2019 for the purpose of having a dispute resolution scheme in place to resolve any disputes with the Australian Financial Complaints Authority (AFCA); and to resolve any applicable compensation requirements including professional indemnity insurance.
Berndale and Mr D鈥橝more each has the right of review to the Administrative Appeals Tribunal (AAT)聽in respect of ob体育鈥檚 decision.
Background
Berndale Capital Securities Pty Ltd: ACN 113 616 032
AFS Licence: 290108
The AFCA has replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Editor's note:
Berndale has applied to the聽AAT in respect of ob体育鈥檚 decision to cancel its AFS licence. The first directions hearing is scheduled for February 2019.
Editor's note 2:
Following a directions hearing on 11 February 2019, the matter will next be before the聽AAT for a further directions hearing on 15 March 2019.
Editor's note 3:
At the directions hearing on 15 March 2019, a further directions hearing was set for聽9 May 2019. ob体育 is to file its Statement of Facts, Issues and Contentions by 2 May 2019.
Editor's note 4:
On 4 October 2019, the AAT dismissed Berndale鈥檚 application for review of ob体育鈥檚 decision to cancel its licence following withdrawal of the application by Berndale.