Allegra’s AFSL refusal upheld by AAT
The refusal of Allegra Financial Services’ Australian financial services licence (AFSL) by the corporate watchdog has been upheld by the Administrative Appeals Tribunal (AAT).
The firm applied for an AFSL from the Australian Securities Investments Commission (ASIC) in April 2018 to provide personal financial product advice to retail and wholesale clients. In July 2019, ASIC refused the licence application as it was concerned about the past conduct of the firm’s sole director and proposed responsible manager, Lachlan Schonfelder.
On 30 November, 2020, the AAT found Schonfelder engaged in conduct that it was not satisfied with for Allegra to provide financial services efficiently, honestly and fairly.
ASIC said 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 Schonfelder provided misleading information to ASIC regarding the reasons that he ceased employment with the licensee.
ASIC commissioner, Danielle Press, said: “ASIC has fundamental concerns with Mr Schonfelder, and the AAT’s decision emphasises that these concerns cannot be solved by attempting to outsource compliance and monitoring to a third-party.
“The decision reinforces the recent licensing reforms under the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators [2019 Measures]) Act 2020 which provide that ASIC 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 ASIC’s licensing assessment.”
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