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Law Reform: Investment Advisers
A Discussion Paper

APPENDIX "B": AUSTRALIA'S LICENCE REVOCATION AND BANNING ORDER LAWS

• The situations in which the ASIC may revoke a licence include if:
  1. the licensee being a natural person becomes an insolvent under administration;

  2. the licensee being a natural person is convicted of serious fraud;

  3. the licensee being a natural person becomes incapable, through mental or physical incapacity, of managing his or her affairs;

  4. the licensee asks the ASIC to revoke the licence;

  5. the application for the licence contained matter that was false in a material particular or materially misleading;

  6. there was an omission of material matter from the application for the licence;

  7. the licensee is a natural person and the ASIC has reason to believe that he or she is not of good fame and character;

  8. the licensee is a body corporate and the ASIC is satisfied that the educational qualifications or experience of a person who:
     1. is an officer of the body; and

     2. was not an officer of the body when the licence was granted; are or is inadequate having regard to duties that the officer performs, or will perform, in connection with the holding of the licence;

  9. the licensee is a body corporate and the ASIC is satisfied that:
     1. an officer of the body corporate performs, or will perform, in connection with the holding of the licence, duties that are or include duties (in this paragraph called the "different duties") other than those having regard to which the ASIC was satisfied, before granting the licence, that the officer's educational qualifications and experience were adequate; and

     2. the officer's educational qualifications or experience are or is inadequate having regard to the different duties;

  10. the licensee is a body corporate and;
      1. a licence held by a director, secretary or executive officer of the body is revoked;

      2. an order is made under section 830 against such a director, secretary or executive officer;

  11. the ASIC has reason to believe that the licensee has not performed efficiently, honestly and fairly the duties of a holder of a dealers licence or an investment advisers licence, as the case requires; or

  12. the ASIC has reason to believe that the licensee will not perform those duties efficiently, honestly and fairly.

• If the ASIC decides to revoke a licence on the basis of the matters in paragraphs (e) to (l) above, it must give the licensee an opportunity to appear at a hearing and make submissions to the ASIC.

• The ASIC also has powers to ban a person from acting as a representative of a dealer or an investment adviser if:
  1. he or she becomes an insolvent under administration;

  2. he or she is convicted of serious fraud;

  3. he or she becomes incapable, through mental or physical incapacity, of managing his or her affairs;

  4. he or she contravenes a securities law;

  5. the ASIC has reason to believe that he or she is not of good fame and character;

  6. the ASIC has reason to believe that he or she has not performed efficiently, honestly and fairly the duties of:
     1. a representative of a dealer; or

     2. a representative of an investment adviser.

  7. The ASIC has reason to believe that he or she will not perform efficiently, honestly and fairly the duties of:
     1. a representative of a dealer; or

     2. a representative of an investment adviser.

• A person who has been banned may apply to the ASIC to vary or revoke the banning order. The ASIC may apply to the Court for orders permanently, or for a specified period, disqualifying a person from holding a dealers or an investment advisers' license or prohibiting a person from acting as a representative of a dealer or an investment adviser.