AFS licensing – Requirements for certain applicants to provide further information

This information sheet (INFO 240) is for Australian financial services (AFS) licence applicants that are:

  • a body corporate
  • also regulated by the Australian Prudential Regulation Authority (APRA), or
  • proposing to provide certain financial services and financial products.

We now require these applicants (either those seeking an AFS licence or AFS licensees seeking a variation) to provide certain additional information and documents as part of their application.

An applicant that is:

Note: We will update our regulatory guidance in the AFS Licensing Kit (RG 1–3) to reflect these requirements as soon as possible. We will also update the AFS licensing application portal (which includes Form FS01 Application for AFS licence, Form FS03 Application for variation of authorisation and other conditions and Form FS20 Change of details for an AFS licence).

Background to the new requirements

The AFS Licensing Kit (RG 1–3) provides applicants with information on how to apply for an AFS licence or a variation to their existing licence, how to complete the online application forms, how to prepare ‘core’ supporting proof documents, and what further additional non-core proof documents may be required.

We conducted a review of our AFS licensing requirements in December 2018. Following that review, we now require the information and documentation set out in this information sheet: see sections 913(1)(ca) and 913B(3)(i) of the Corporations Act 2001 (Corporations Act), and regulation 7.6.03 of the Corporations Regulations 2001.

Until we update the AFS licensing application portal, we will not reject an application for lodgement solely because it does not include the information or documents set out in this information sheet (where relevant). However, we will only complete our assessment once this information is provided.

Category 1: Body corporate applicants

A body corporate applicant seeking an AFS licence must provide to ASIC:

  • the full names of the applicant’s responsible officers (see 'Who is a responsible officer?' below)
  • a national criminal history check and bankruptcy check for each responsible officer who is not also nominated to be a responsible manager
  • the names and current addresses of each director and secretary of the body corporate applicant
  • the applicant’s Australian Business Number (ABN) if it has one, or a statement that the applicant does not have an ABN.

It can take six weeks or more to obtain national criminal history checks. Applicants should obtain these checks for their responsible officers before applying.

Download Attachment to AFS licence application by body corporate (Word 82 KB) for a template to help body corporate applicants provide the relevant additional information.

Who is a responsible officer?

A 'responsible officer' is an officer of the body corporate who would perform duties in connection with the holding of an AFS licence: for the full definition, see section 9 of the Corporations Act.

An 'officer' is also defined in the Corporations Act, and includes:

  • a director or secretary of the body corporate
  • a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the body corporate’s business, or who has the capacity to significantly affect the body corporate’s financial standing
  • a person whose instructions or wishes the directors of the body corporate are accustomed to act on (excluding advice given by the person in the proper performance of the functions attached to their professional capacity or their business relationship with the directors or the body corporate).

For the full definition of 'officer', see section 9 of the Corporations Act.

Category 2: APRA-regulated body applicants

All applicants that are, or intend to be, APRA-regulated bodies must provide the following documents about the applicant’s responsible managers:

  • a national criminal history check that is no more than 12 months old
  • a bankruptcy check that is no more than 12 months old
  • two business references that are no more than 12 months old.

For further guidance on these people proofs, see Section E of Regulatory Guide 2 AFS Licensing Kit: Part 2—Preparing your AFS licence or variation application (RG 2).

Note: This conflicts with the published guidance at RG 2.283. We will update RG 2 as soon as possible.

It can take six weeks or more to obtain national criminal history checks. Applicants should obtain these checks for their responsible managers before applying.

Category 3: Applicants intending to provide certain financial services and certain financial products

As part of an application for an AFS licence or variation, applicants must specify the licence authorisations that cover the financial services and financial products that they intend to provide.

Applicants that want to provide the financial services and financial products in Table 1 and Table 2 must include the additional non-core proofs listed in those tables in their applications.

We have set out further guidance on the non-core proofs that we need to assess applications in Regulatory Guide 3 AFS Licensing Kit: Part 3—Preparing your additional proofs (RG 3).

Authorisations requiring additional non-core proofs

An applicant requesting a licence authorisation specified in Table 1 must provide the listed additional non-core proofs.

Table 1: Additional non-core proofs required for specified authorisations

Authorisation

Additional non-core proof

Crowd-sourced funding intermediary

B5: Information Technology Capacity Statement

C11: Crowd-Funding Service Statement

Custody

C1: Custodial/Depository Service Statement

Derivatives

C4: Derivatives Statement

B3: Arrangements for Managing Conflicts of Interests

B3: Compliance Arrangements

B7: Risk Management System Statement

Financial product advice (personal advice only)

B3: Compliance Arrangements

B4: Program for Monitoring, Supervision and Training of Representatives

B7: Risk Management System Statement

Foreign exchange contracts

C5: Foreign Exchange Operating Statement

B3: Arrangements for Managing Conflicts of Interests

B3: Compliance Arrangements

B7: Risk Management System Statement

Investor directed portfolio service (IDPS) operator

C1: IDPS Statement

C1: Funds under Management/Custody Statement

C1: Product/Service Distribution Statement

C1: Custodial/Depository Service Statement

Life insurance company

C7: Life Insurance Capacity Statement

Life or general insurance underwriters

C8: Underwriting Agency Capacity Statement

Make a market

C3: Market Maker Statement

B7: Risk Management System Statement

Margin lending issuer

C10: Margin Lending Facilities

B7: Risk Management System Statement

Market participants (stockbrokers)

A4: Membership of a Licensed Market

Managed discretionary account (MDA) provider

C9: MDA Operator Capacity Statement

B3: Compliance Arrangements

B3: Arrangements for Managing Conflicts of Interests

B7: Risk Management System Statement

Miscellaneous financial facility

A4: Miscellaneous Financial Facility Statement

Responsible entity

C2: Scheme Operating Capacity Statement

C2: Scheme Property Statement

C2: Funds under Management Details

C1: IDPS Statement

C1: Custodial/Depository Service Statement

Registrable superannuation entity (RSE) licensees that have applied for or already hold an authorisation to operate a registered management investment scheme

B5: Financial Statements and Financial Resources (core proof)

B7: Risk Management System Statement

Circumstances requiring additional non-core proofs

Additionally, an applicant that intends to provide financial services in the circumstances specified in Table 2 must include the listed additional non-core proofs in their application.

Table 2: Additional non-core proofs required in specified circumstances

Specified circumstances

Additional non-core proof

The applicant has nominated a responsible manager that is an officer of another AFS licensee, or is employed or engaged by another AFS licensee

B3: Arrangements for Managing Conflicts of Interests

Note: We expect this proof to include specific details about the arrangements for managing the responsible manager's conflicts of interest that arise because of their various roles.

The applicant intends to outsource a material activity required to provide the financial service or product

B3: Outsourcing Statement

The applicant has nominated a single responsible manager for a particular authorisation or authorisations

B5: Human Resources Capacity Statement

Note: We expect this proof to include specific details about how the applicant will deal with the temporary, periodic or permanent absence of that responsible manager.

The applicant intends to conduct a remittance business and seeks an AFS licence that includes authorisations to deal or arrange to deal by issuing:

  • Deposit and Payment Products – Non-cash payment products and Foreign Exchange Contracts, or
  • Deposit and Payment Products – Non-cash payment products.

The applicant must provide written confirmation that it has:

  • determined whether it is subject to the requirements of the Australian Transaction Reports and Analysis Centre (AUSTRAC)
  • contacted AUSTRAC and been advised of its obligations by AUSTRAC
  • if required to do so by AUSTRAC, applied to AUSTRAC for enrolment or registration as a remittance service provider.

If the applicant applies for enrolment or registration by AUSTRAC as a remittance service provider and AUSTRAC has approved that application, the applicant must provide evidence of the approval.

If we have determined that we will grant the AFS licence to the applicant, but they have not included this information in their application, they must undertake the steps identified above before we will grant the licence.

Where can I get more information?

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. Omission of any matter in this information sheet will not relieve a company or its officers from any penalty incurred by failing to comply with the statutory obligations of the Corporations Act.

You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

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Last updated: 09/07/2019 04:29