On 31 January 2017, the Administrative Appeals Tribunal (AAT) affirmed ob体育's decision to suspend the Australian financial services (AFS) licence held by MASU Financial Management Pty Ltd (MASU) for a period of eight weeks.
ob体育's decision
ob体育 made a decision to suspend MASU's AFS licence for 8 weeks on 26 April 2016 following concerns that MASU had not complied with its obligations and was likely to contravene its obligations.
MASU appealed ob体育's decision to the Administrative Appeals Tribunal (AAT).聽On 31 January 2017, the AAT affirmed ob体育's decision to suspend MASU's AFS licence for 8 weeks.
AAT affirming ob体育's decision
The AAT found that MASU was not compliant in the past and, despite recent efforts to introduce compliance measures, 'has not yet reached the point where it can be said to be compliant.'聽
The AAT also concluded that 'given that recent history, it is likely further contraventions will occur, at least until those further improvements are implemented鈥� all financial services firms need to embrace their obligations. It is not enough that they take up the cause because they have been caught out and need to appease the regulator. They must learn to want to be compliant.'
In making its decision, the AAT stated that, 'a brief period of suspension will help spur the embrace of a compliance culture and underline the need to avoid a return to bad behaviour鈥hrough the publication of this decision 鈥� it will deter bad behaviour by other firms. The investing public will also be encouraged by the regulatory action because it demonstrates bad behaviour will be sought out and addressed in a constructive way. That is all consistent with ob体育鈥檚 role and the objectives of Chapter 7.'
MASU has the right to appeal to the Federal Court of Australia, on a question of law, within 28 days of the AAT decision.
MASU鈥檚 AFS licence was initially suspended between 27 April 2016 and 4 May 2016 before it lodged an appeal with the AAT. Following the AAT's decision to affirm ob体育's decision, MASU's licence will now be suspended from 6 February 2017 to 25 March 2017.
Background
ob体育 conducted a review of financial advice related to complex products and identified concerns there was 'one size fits all' approach to Statements of Advice as well as 'boiler plated' advice and disclosures.聽
In response to ob体育鈥檚 concerns in December 2013, MASU commenced a review of all its policies, systems and procedures and appointed an external compliance expert to review whether the revised processes are adequate to ensure compliance with the financial services laws (refer: ).
In February 2015, the external compliance expert found that MASU had a significant amount of work to do before its management can be confident that it meets its obligations as an AFS licensee and made a number of recommendations.
By December 2015, MASU had not demonstrated that it was capable of implementing the recommendations made by the external compliance expert in a timely manner and appeared to not understand its obligations as an AFS licensee. In response, ob体育 commenced regulatory actions to address MASU's failure to comply with its obligations under the Corporations Act as an AFS licensee.