Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.6 - LICENSING OF PROVIDERS OF FINANCIAL SERVICES  

Division 8 - Banning or disqualification of persons from providing financial services  

Subdivision A - Banning orders  

SECTION 920A   ASIC ' S POWER TO MAKE A BANNING ORDER  

Making a banning order

920A(1)    

ASIC may, in writing, make one or more orders ( banning orders ) against a person if:

(a)    ASIC suspends or cancels an Australian financial services licence held by the person; or

(b)    the person has not complied with their obligations under section 912A ; or

(ba)    

ASIC has reason to believe that the person is likely to contravene their obligations under section 912A ; or

(bb)    

the person becomes a Chapter 5 body corporate or an insolvent under administration; or

(c)    the person is convicted of fraud; or

(d)    

ASIC has reason to believe that the person is not a fit and proper person to:

(i) provide one or more financial services; or

(ii) perform one or more functions as an officer of an entity that carries on a financial services business; or

(iii) control an entity that carries on a financial services business; or

(da)    

ASIC has reason to believe that the person is not adequately trained, or is not competent, to:

(i) provide one or more financial services; or

(ii) perform one or more functions as an officer of an entity that carries on a financial services business; or

(iii) control an entity that carries on a financial services business; or

(db)    

the person has not complied with any one or more of his or her obligations under section 921F (requirements relating to provisional relevant providers); or

(dc)    

both of the following apply:

(i) a supervisor referred to in section 921F has not complied with any one or more of his or her obligations under that section in relation to a provisional relevant provider;

(ii) both the supervisor and the provisional relevant provider are authorised to provide personal advice to retail clients, on behalf of the person, in relation to relevant financial products; or

(dd)    

both of the following apply:

(i) a provisional relevant provider has not complied with his or her obligations under subsection 921F(7) ;

(ii) the provisional relevant provider is authorised to provide personal advice to retail clients, on behalf of the person, in relation to relevant financial products; or

(de)    

ASIC has reason to believe that the person was authorised, in contravention of subsection 921C(2) , (3) or (4) , to provide personal advice to retail clients in relation to relevant financial products; or

(e)    

the person has not complied with a financial services law (other than subsection 921E(3) (relevant providers to comply with the Code of Ethics)); or

(f)    

ASIC has reason to believe that the person is likely to contravene a financial services law; or

(g)    

the person has been involved in the contravention of a financial services law by another person; or

(h)    

ASIC has reason to believe that the person is likely to become involved in the contravention of a financial services law by another person; or

(i)    

the person is the operator of, or another person connected with, an Australian passport fund, and each of the following is satisfied:

(i) a host regulator for the fund has notified ASIC in writing that it is of the opinion that the person or the fund has not complied, is not complying or is not likely to comply with the law of that host economy to the extent that the law is administered by the host regulator for the fund (including the Passport Rules for the host economy for the fund);

(ii) ASIC is of the opinion that it should make the banning order, given the potential impact of the failure, or potential failure, to comply on members or potential members of the fund; or

(j)    

the person has, at least twice, been linked to a refusal or failure to give effect to a determination made by AFCA relating to a complaint that relates to:

(i) a financial services business; or

(ii) credit activities (within the meaning of the National Consumer Credit Protection Act 2009 ); or

(ja)    

all of the following apply:

(i) an individual who holds an Australian financial services licence, a partner in a partnership, a body corporate or a trustee of a trust is required to pay an amount in accordance with a relevant AFCA determination;

(ii) the CSLR operator has paid, under section 1063 , an amount of compensation for the relevant AFCA determination;

(iii) at the time the payment is made by the CSLR operator, the person is the individual licensee, a partner in the partnership, an officer of the body corporate or the trustee of the trust; or

(k)    

subsection (1C) applies to the person in relation to 2 or more corporations.

Note: To work out whether a person has been linked as described in paragraph (j), see section 910C .

920A(1AA)    

Subsection (1) has effect subject to subsection (2) .

When a person is not a fit and proper person

920A(1A)    

For the purposes of paragraph (1)(d) , ASIC must have regard to the matters in section 913BB .

When a person contravenes a financial services law

920A(1B)    
To avoid doubt, a person contravenes a financial services law if a person fails to comply with a duty imposed under that law, even if the provision imposing the duty is not an offence provision or a civil penalty provision.

When a person has been an officer of a corporation unable to pay its debts

920A(1C)    

This subsection applies to a person in relation to a corporation if, within the last 7 years:

(a)    the person was an officer of the corporation when the corporation was:

(i) carrying on a financial services business; or

(ii) engaging in credit activities (within the meaning of the National Consumer Credit Protection Act 2009 ); and

(b)    the corporation was wound up either:

(i) while the person was an officer of the corporation; or

(ii) within the 12 months after the person ceased to be an officer of the corporation; and

(c)    a liquidator lodged a report under subsection 533(1) (including that subsection as applied by section 526-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 ) about the corporation ' s inability to pay its debts.

Person to be given an opportunity to be heard

920A(2)    

Subject to subsection (3) , if ASIC has not delegated its power to make a banning order against a person to a Financial Services and Credit Panel, ASIC may make the order only after giving the person an opportunity:

(a)    to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b)    to make submissions to ASIC on the matter.

Note: If ASIC delegates its power to make a banning order against a person to a Financial Services and Credit Panel, the panel may make the order only after holding a hearing in relation to the proposed order (see section 157 of the ASIC Act).

920A(3)    

ASIC may make a banning order against a person without giving the person the opportunities mentioned in subsection (2) if:

(a)    either:

(i) ASIC has not delegated its power to make the banning order to a Financial Services and Credit Panel; or

(ii) ASIC exercises its power to make the banning order despite such a delegation; and

(b)    ASIC ' s grounds for making the banning order are or include both of the following:

(i) that the suspension or cancellation of the relevant licence took place under section 915B ;

(ii) that the person has been convicted of serious fraud.

Note: See section 34AB of the Acts Interpretation Act 1901 (effect of delegation).

Special procedure for RSE licensees

920A(3A)    

If a person against whom ASIC proposes to make a banning order is a financial services licensee who is authorised to provide a superannuation trustee service, the following provisions apply:

(a)    ASIC cannot make the banning order if doing so would, in ASIC ' s opinion, have the result of preventing the licensee from providing that service, unless:

(i) APRA agrees in writing to the making of the banning order; or

(ii) the licensee ' s RSE licence is not in effect, and is not treated by section 29GB of the Superannuation Industry (Supervision) Act 1993 as if it were in effect;

(b)    if ASIC makes the banning order and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

920A(3B)    
A failure to comply with a requirement of subsection (3A) to get the agreement of APRA about a banning order does not invalidate the action taken.

Copy of banning order to be given to the person

920A(4)    

ASIC must give a copy of a banning order to the person against whom it was made.