ob体育鈥檚 decision to refuse Allegra Financial Services Pty Ltd (Allegra) an Australian financial services licence (AFSL) to provide personal financial product advice to retail and wholesale clients has been affirmed by the Administrative Appeals Tribunal (AAT).
On 30 November 2020, the AAT found that Allegra鈥檚 controller, sole director and proposed responsible manager, Lachlan Schonfelder, engaged in conduct such that it could not be satisfied that Allegra would provide financial services efficiently, honestly and fairly. The lack of candour in Mr Schonfelder鈥檚 dealings with ob体育 also raised serious doubts in the AAT鈥檚 mind as to whether Allegra would be able to deal honestly.
Mr Schonfelder accepted a personal loan from a client while he was an authorised representative of another licensee and his employment was terminated. Allegra failed to disclose this in its application and Mr Schonfelder provided misleading information to ob体育 regarding the reasons that he ceased employment with the licensee.
In making its decision, the AAT鈥檚 decision turned on Mr Schonfelder鈥檚 past conduct, and on his potential future conduct, given the central role he plays in the business and operations of Allegra.
ob体育 Commissioner Danielle Press said the decision is a clear reminder to applicants that they must deal openly and honestly and provide full and frank disclosure to ob体育 when applying for a licence and responding to requests for additional information.
鈥榦b体育 has fundamental concerns with Mr Schonfelder, and the AAT鈥檚 decision emphasises that these concerns cannot be solved by attempting to outsource compliance and monitoring to a third-party.鈥�
鈥�The decision reinforces the recent licensing reforms under the聽Financial Sector Reform (Hayne Royal Commission Response鈥擲tronger Regulators [2019 Measures]) Act 2020聽which provide that ob体育 must not grant a licence unless it has no reason to believe a controller, officer or senior manager is not a fit and proper person to provide financial services, or perform one or more functions as an officer of the applicant if a licence was granted. The character of these persons remains a critical aspect of ob体育鈥檚 licensing assessment鈥�, Ms Press said.
Background
Allegra applied to ob体育 for an AFSL on 17 April 2018. Mr Schonfelder is Allegra鈥檚 sole director and majority shareholder and its nominated sole responsible manager.
On 15 July 2019, a delegate of ob体育 refused Allegra鈥檚 licence application under s913B of the聽Corporations Act 2001. The delegate was particularly concerned about the certain past conduct of Mr Schonfelder.
Allegra appealed ob体育鈥檚 decision to the AAT on 13 August 2019.
Allegra has 28 days to appeal the AAT鈥檚 decision to the Federal Court of Australia on a question of law.