Change in control of AFS licensee
An AFS licence is subject to conditions prescribed by the Corporations Act and regulations in addition to the conditions imposed on the AFS licence certificate.
One of these conditions is that if an entity starts to control, or stops controlling an AFS licensee, the licensee must notify us of the change in control (s912DA of the Corporations Act).
What is a change in control?
A change in control includes a transaction, or a series of transactions in a 12-month period, that results in a person having control of the financial services licensee (either alone or together with associates of the person).
if the financial services licensee is a body corporate:
having the capacity to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the financial services licensee, or
directly or indirectly holding more than one half of the issued share capital of the financial services licensee (not including any part of the issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), or
the capacity to control the composition of the financial services licensee's board or governing body, or
the capacity to determine the outcome of decisions about the licensee's financial and operating policies. In determining whether a person has the capacity to determine the outcome of decisions about a financial services licensee's financial and operating policies, the following matters are taken into account:
the practical influence the person can exert (rather than the rights it can enforce)
any practice or pattern of behaviour affecting the financial services licensee's financial or operating policies is to be taken into account (whether or not it involves a breach of an agreement or a breach of trust).
Control is defined at section 910B of the Corporations Act.
When does ASIC need to be notified?
An AFS licensee must notify us of the particulars of the change in control no later than the end of 30 business days after the day the entity starts to control, or stops controlling, the AFS licensee.
A failure to comply with the notification requirements is an offence.
How does an AFS licensee notify ASIC of a change in control?
To notify ASIC of a change in control, an AFS licensee must lodge a Form FS20 Change of details for an Australian financial services licence (FS20).