AAT affirms ASIC's decision to refuse to grant AFS licence

The AAT affirmed ASIC’s decision on 4 February 2019 on the grounds that Chalhoub Nominees’ professional indemnity insurance was inadequate.

It also found that the nominated responsible manager, Akram El-Fahkri, could not meet the knowledge requirements because he had not completed relevant training and the tribunal could not be satisfied that the company would do all things necessary to ensure that the financial services proposed to be covered by the AFS licence would be provided efficiently, honestly and fairly.

"The decision reinforces that applicants need to meet the standards imposed by the law and to provide ASIC with all relevant information requested to enable ASIC to make its decision whether a licence is to be granted," ASIC executive director of assessment and intelligence Warren Day, said.

This is the third instance in as many months where the AAT has affirmed ASIC’s refusal to grant a limited AFS licence on the basis that the applicants did not adequately meet requirements.

"We stand by our assessment process and encourage applicants to ensure they fully understand and can demonstrate their ability to comply with the responsibilities that come with holding a limited licence," Mr Day said.

On 25 June 2016, Chalhoub Nominees applied for a limited AFS licence to provide financial product advice in relation to self-managed superannuation funds, among other financial products.

After assessing the application and providing the applicant with a right to make submissions and be heard, on 18 December 2017, an ASIC delegate determined that the application be refused.

Chalhoub Nominees appealed ASIC’s decision to the AAT on 7 February 2018.