Clemente Group Holdings Pty Ltd and Australian Securities and Investments Commission

This matter concerned an application by Clemente Group Holdings Pty Ltd for a financial services licence, which was opposed by the Australian Securities and Investments Commission (ASIC). The decision was made by J F Toohey SM in the Administrative Appeals Tribunal. The core of the dispute revolved around whether the Tribunal had "no reason to believe" the applicant would contravene its obligations as a licensee, a threshold requirement for granting such a licence.

The Tribunal was required to determine whether Clemente Group Holdings Pty Ltd had provided sufficient information and evidence to satisfy the Tribunal that it possessed the capacity to meet the general obligations of a financial services licensee, particularly in light of the risks associated with its proposed business activities. This involved assessing the competence, capacity, and integrity of Mr Batten, a key individual associated with the applicant, and evaluating the adequacy of the measures proposed to mitigate identified risks.

The Tribunal considered evidence from both parties, including oral testimony from Mr Batten and expert evidence from Mr Tamas Szabo, engaged by ASIC. Mr Szabo, an experienced professional in the over-the-counter derivatives market, provided an opinion on the risks involved in the proposed services and methods of risk mitigation. The Tribunal preferred Mr Szabo's assessment of the risks over Mr Batten's evidence, finding that the applicant had not sufficiently demonstrated adequate technical, human, and financial resources to conduct the proposed business and mitigate associated risks. Consequently, the Tribunal concluded it had sufficient reason to believe the applicant was likely to contravene its obligations under section 912A of the Corporations Act 2001.

The Tribunal affirmed the decision under review, meaning the application for the financial services licence was refused. The Tribunal was not reasonably satisfied that there was no reason to believe the applicant would contravene its obligations if the licence were granted.