Australian Regulator Temporarily Suspends AFS License of Ballast Financial Management Pty Ltd

The Australian Securities & Investments Commission (ASIC) has“provisionally” suspended the Australian Financial Services (AFS) license of Ballast Financial Management Pty Ltd(Ballast) until December 18, 2020.

According to the Australian regulator, the AFS of Ballast has been suspended under section 915B of the Corporations Act 2001 (Cth) (Corporations Act) because the company stopped carrying on a financial services business. 

Ballast ceased carrying on a financial services business when it was unable to obtain professional indemnity insurance to comply with its obligation to have adequate compensation arrangements.

Under s912B of the Corporations Act 2001, AFS licensees must have arrangements for compensating retail clients for losses they suffer as a result of the licensee or its representatives breaching their obligations in Chapter 7.

It is noted that the firm is unable to fulfill its obligation of making adequate compensation arrangements by professional indemnity insurance.

During the temporary suspension lasting for 10 weeks, Ballast will be given enough time to set out to make adequate compensation arrangements. At the same time, Ballast will also be able to identify and appoint a new responsible manager with appropriate qualification and experience after its previous responsible manager’s resignation.

The watchdog will consider revoking Ballast’s license if the company fails to recommence its financial services business by the end of suspension.