ASIC Cancels AFS License of Former Stockbroking Firm BBY Limited

ASIC has canceled the AFS license held by BBY Limited after initially suspending it back in May 2015.

June 28, 2021, | AtoZ Markets – The Australian Securities and Investments Commission (ASIC) has announced on Monday that it has canceled the Australian Financial Services (AFS) license held by BBY Limited (BBY), effective 24 June 2021. BBY operated the SmarTrader brokerage platform in Australia.

BBY AFS license canceled

BBY Ltd, the main operating entity of the BBY group, was a financial services licensee headquartered in Sydney with offices in Adelaide, Auckland, Brisbane, Gold Coast, London, Melbourne, New York, Perth, and Wellington.

BBY was also a market participant of ASX, Chi-X, and SSX (formerly APX), and a clearing and settlement participant of the ASX. The BBY group consisted of 10 entities and included two other financial services licensees: BBY Advisory Services Pty Ltd and SmarTrader Limited.

The terms of the cancellation allow the BBY AFS license to continue in effect until 31 March 2022 for the following purposes only:

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  • to ensure that clients of BBY continue to have access to an external dispute resolution scheme;
  • to ensure that clients of BBY continue to have access to the National Guarantee Fund;
  • to ensure that the receivers and liquidators have the legal authority to transfer a client’s “holder identification number” to another market participant with instructions from the client or to convert a licensee sponsored holding to an issuer sponsored holding in accordance with the ASX Settlement Operating Rules; and
  • to ensure BBY continues to be required to have arrangements for compensating retail clients for loss or damages suffered as a result of breaches of the Corporations Act by the companies or their representatives.

A troubled firm

On May 28, 2015, the Aussie regulator first suspended BBY’s AFS license for a period of three years. This followed the appointment of Stephen Vaughan and Ian Hall as joint administrators to BBY on 17 May 2015. Steven Parbery and Brett Lord were appointed receivers and managers of BBY on 18 May 2015. From 29 October 2019 Rahul Goyal and Scott Langdon of KordaMentha are the appointed receivers and managers of BBY.

On May 27, 2018, ASIC extended the license suspension for 12 months until 28 May 2019. That suspension was extended on May 27, 2019, and again on 27 May 2020, ASIC decided to extend the suspension until 30 June 2021.

Under the Corporations Act, ASIC has the power to suspend or cancel an AFS license, without holding a hearing, where the AFS license is held by a body corporate that is placed under external administration. BBY has a right to seek a review of ASIC’s decision at the Administrative Appeals Tribunal.

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