10-203AD AAT sets aside ASIC action against Opus Capital
Friday 24 September 2010
The Administrative Appeals Tribunal (AAT) has set aside a decision by the ASIC to cancel the Australian financial services (AFS) licence held by Opus Capital Limited (Opus). Opus is the responsible entity for 14 unlisted property funds.
ASIC yesterday received the AAT’s reasons for its decision and is considering its options regarding an appeal.
Background
The Corporations Act 2001 requires that a financial services licensee must have adequate resources (including financial) to provide the financial services covered by their licence and to carry out supervisory arrangements.
Given this requirement, ASIC imposes a number of conditions on a licensee to help ensure compliance with the law and the protection of investor interests. These conditions include solvency, net positive asset requirement, cash needs requirements
Net Tangible Assets (NTA).
NTA is a measure of general financial standing and is an additional requirement imposed on AFS licensees operating managed investment schemes, providing custody services or margin lending facilities. This condition reflects the additional responsibilities of these licensees in managing investor funds.
ASIC’s decision to cancel Opus’ licence was made after the company failed to rectify an ongoing breach of the NTA condition of its licence to the Commission’s satisfaction. ASIC amended its register to reflect its decision to cancel the AFS licence on 31 August 2010.
Opus applied to the AAT and obtained orders staying ASIC’s decision and suppressing the release of any information concerning the decision and the matters before the AAT. ASIC opposed the suppression orders.
The AAT subsequently made orders on 20 September 2010 setting aside ASIC’s decision and lifted the suppression orders.
ASIC has amended its register to reflect the decision of the AAT.
ASIC Website: Printed 05/20/2013
