Australia’s Full Federal Court has found that BPS Financial Pty Ltd could not rely on the ‘authorised representative’ exemption under the Corporations Act when issuing the ‘Qoin Wallet’, a non-cash payment facility, on its own behalf.

The Australian Securities and Investments Commission (ASIC) appealed an aspect of the Federal Court’s decision delivered on 3 May 2024, which found BPS was exempt from the requirement to hold an Australian financial services (AFS) licence while it was an authorised representative of PNI Financial Services Pty Ltd (PNI) between 5 November 2020 and 30 August 2021.

The Full Court today found that BPS was acting on its own behalf when issuing the Qoin Wallet and not as a representative of PNI. Accordingly, the Full Court found that BPS was required to hold an AFS licence.

The Full Court declined to consider whether the issuer of a financial product can never act in their own capacity when they are operating as an authorised representative of an AFS licensee, or whether AFS licensees must always be involved in the issuing of relevant financial products when they are sold or promoted by its authorised representative.

The matter will proceed to a penalty hearing on a date yet to be set.

BPS promoted Qoin tokens to retail consumers and business owners (termed ‘Qoin Merchants’) as a means of making payment for goods and services offered by Qoin Merchants. Up to 30 September 2022 the Qoin Wallet was issued more than 93,000 times and BPS received in excess of $40 million from the sale of Qoin Tokens.