AAT upholds decision to cancel firm’s AFSL

The Administrative Appeals Tribunal (AAT) has upheld a decision by the Australian Securities and Investments Commission (ASIC) to cancel the Australian financial services (AFS) licence of Olive Financial Markets.

ASIC cancelled Olive’s AFSL in March 2020 following concerns it had breached a number of its legal obligations. The firm operated two Gold Coast-based financial services businesses between 2013 and 2018, including a managed discretionary account service and a superannuation rollover business.

After a hearing held in early 2021, the AAT found that Olive’s contraventions included engaging in unconscionable conduct, prohibited hawking, misleading or deceptive conduct, false or misleading statements, failing to provide appropriate advice and failing to act in the best interests of clients.

“Those problems went undetected — or were ignored — over a long period partly because of serious shortcomings in the compliance arrangements and complaints handling process,” the AAT said.

“All that bad behaviour went on under the noses of senior managers who manifestly failed to supervise those for whom they were responsible.”

While improvements have been made by Olive and the AAT indicated that they have no reason to believe Olive is likely to contravene its obligations in the future, the tribunal was satisfied that the cancellation of the licence was appropriate.

In its decision, the AAT highlighted the “serious and systemic” contraventions that occurred over an extended period and stated that “cancellation is the only appropriate option given the seriousness of that conduct and the need to deter similar conduct elsewhere”.

The AAT found that Olive did not comply with its obligations as an AFS licensee by failing to:

• comply with financial services laws;
• take reasonable steps to ensure that its representatives complied with financial services laws;
• have available, adequate resources to provide the financial services covered by the licence and to carry out supervisory arrangements;
• ensure its representatives were adequately trained and competent to provide the financial services covered by the licence;
• have an appropriate internal dispute resolution mechanism; and
• do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly.