What is an AFS licence?
An Australian financial services (AFS) licence authorises licensees to:
- provide financial product advice to clients;
- deal in a financial product;
- make a market for a financial product;
- operate a registered scheme;
- provide a custodial or depository service;
- provide traditional trustee company services.
An AFS licence is required to conduct a financial services business.
ASIC assesses applications for AFS licences as part of our role as regulator of the financial services industry. When we assess a licence application we consider whether the applicant:
- is competent to carry on the kind of financial services business specified in the application;
- has sufficient financial resources to carry on the proposed business — unless regulated by the Australian Prudential Regulation Authority (APRA); and
- can meet the other obligations of an AFS licensee.
Consumers should be aware that the licensing process is a point-in-time assessment of the licensee, not of its owners or employees. Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services.
ASIC must grant a licence if a business shows it can meet basic standards such as training, compliance, insurance and dispute resolution. The business is responsible for maintaining these standards.
A licence does not mean that ASIC endorses the company, financial product or advice or that investors cannot incur a loss from dealing with it.
A licensee must not use the ASIC logo or otherwise state or imply that ASIC endorses the licensee or its products and services.