ASIC suspends license of Ballast Financial Management
The Australian Securities & Investments Commission (ASIC) today announced the suspension of the Australian financial services (AFS) licence of Perth-based financial advice provider Ballast Financial Management Pty Ltd. The suspension will last until December 18, 2020.
The licence was suspended because Ballast had stopped carrying on a financial services business. The regulator explains that, under s915B of the Corporations Act 2001, it may suspend or cancel an AFS licence without offering a hearing if the licensee ceases to carry on the financial services business.
Ballast stopped carrying on a financial services business when it was unable to obtain professional indemnity insurance to comply with its obligation to have adequate compensation arrangements.
Under s912B of the Corporations Act 2001, AFS licensees must have arrangements for compensating retail clients for losses they suffer as a result of the licensee or its representatives breaching their obligations in Chapter 7.
The 10-week suspension will secure Ballast sufficient time to put in place adequate compensation arrangements. In addition, the suspension provides Ballast an opportunity to identify and appoint an appropriately qualified and experienced responsible manager following the resignation of its previous responsible manager.
If Ballast is unable to demonstrate that it is in a position to recommence its financial services business by the end of the 10-week suspension, ASIC will consider cancelling its licence.