CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

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  

920A(1)  
ASIC may make a banning order against a person, by giving written notice to the 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 an insolvent under administration; or


(c) the person is convicted of fraud; or


(d) ASIC has reason to believe that the person is not of good fame or character; or


(da) ASIC has reason to believe that the person is not adequately trained, or is not competent, to provide a financial service or financial services; 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 section 921E (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.

920A(1A)  
In considering whether, at a particular time, there is reason to believe that a person is not of good fame or character, ASIC must (subject to Part VIIC of the Crimes Act 1914 ) have regard to:


(a) any conviction of the person, within 10 years before that time, for an offence that involves dishonesty and is punishable by imprisonment for at least 3 months; and


(b) whether the person has held an Australian financial services licence that was suspended or cancelled; and


(c) whether a banning order or disqualification order under Division 8 has previously been made against the person; and


(d) any other matter ASIC considers relevant.

Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

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.

920A(2)  
However, ASIC may only make a banning order against a person 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.

920A(3)  
Subsection (2) does not apply in so far as ASIC ' s grounds for making the banning order are or include the following:


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


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


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