Uninsured firm stands to lose financial services licence

It has about 10 weeks to secure coverage

Uninsured firm stands to lose financial services licence

Professionals Risks

By Terry Gangcuangco

Ballast Financial Management Pty Ltd is in danger of losing its Australian financial services (AFS) licence if it fails to secure the required professional indemnity insurance.

In a release today, the Australian Securities & Investments Commission (ASIC) said it has suspended Ballast’s licence until December 18, after the Perth-based financial advice provider stopped operating a financial services business.

ASIC noted: “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 was highlighted that Ballast – which has held AFS licence number 233180 since October 2003 – will have “sufficient time” while its licence is suspended to secure the necessary coverage.

“The suspension also provides Ballast an opportunity to identify and appoint an appropriately qualified and experienced responsible manager following the resignation of its previous responsible manager,” added ASIC.

“If Ballast is unable to demonstrate that it is in a position to recommence its financial services business by the end of the 10-week suspension, ASIC will consider cancelling its licence.”

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