Rainbow Legend Group Pty Ltd and Australian Securities and Investments Commission

Rainbow Legend Group Pty Ltd (the applicant) sought judicial review of a decision by the Australian Securities and Investments Commission (ASIC) to cancel its Australian Financial Services Licence (AFSL). The dispute concerned whether the applicant had breached its obligations as a financial services licensee. The matter was heard by Deputy President S E Frost of the Administrative Appeals Tribunal.

The primary legal issue before the Tribunal was whether ASIC's decision to cancel the applicant's AFSL was the correct and preferable decision in the circumstances. This required the Tribunal to consider whether the applicant had breached its obligations under the *Corporations Act 2001* (Cth) and relevant regulatory requirements, and if so, whether cancellation was the appropriate regulatory response.

Deputy President Frost found that while there were deficiencies in the applicant's compliance and risk management systems, these did not warrant the outright cancellation of the AFSL. The Tribunal reasoned that the breaches identified, though serious, were capable of being rectified. Consequently, the Tribunal set aside ASIC's decision to cancel the licence and substituted a new decision to suspend the AFSL for a period of 12 months, subject to a range of conditions designed to address the identified compliance and risk management failings.