Cancelling your AFS licence

Cancelling your licence

Getting your security bond back

Getting your security bond back if you have satisfied current compensation requirements

Cancelling your licence

If you no longer need your Australian financial services (AFS) licence, you can ask ASIC to cancel it. You must maintain professional indemnity (PI) insurance and membership of an ASIC-approved external dispute resolution (EDR) scheme until you receive notification that we have cancelled your licence.

If your company holds an AFS licence and is placed into external administration, you should request a licence cancellation.

Before you request cancellation, you should first:

  1. revoke any authorisations you have given to representatives and notify ASIC of the revocations within 10 business days through ASIC Connect: see section 916F(3) of the Corporations Act 2001. You should also notify all representatives of the revocation
  2. arrange for de-registration of registered managed investment schemes or transfer of the scheme(s) to a new responsible entity
  3. confirm the status of any disputes with EDR schemes. We will make our own inquiries with your EDR scheme if you have provided services to retail clients
  4. take immediate steps to lodge Form FS70 Australian financial services licensee profit and loss statement and balance sheet and/or Form FS71 Auditor’s report for AFS licensee for any financial year that ends before the date the licence is cancelled. For further information, see Outstanding financial statements and auditor’s report below
  5. take steps to discharge any amounts owed to ASIC. You can confirm your account balance by telephoning the Customer Contact Centre on 1300 300 630 (within Australia) or +61 3 5177 3988 (outside Australia).

To cancel your licence, complete the request for cancellation and write a covering letter that explains in detail the reasons that you require cancellation of your licence and includes all your contact details (postal address, email address, telephone number). The covering letter should clearly set out:

  • your licence number
  • that you want ASIC to cancel your AFS licence
  • that you have ceased or will cease to carry out any financial services business that requires an AFS licence
  • the date you cease or will cease to carry out the financial services business
  • your reason(s) for ceasing your financial services business
  • whether you will continue to operate your financial services business under an exemption from the requirement to hold an AFS licence
  • whether you are under administration (i.e. whether you have been declared bankrupt, are under a personal insolvency arrangement, are under a debt agreement, are in receivership, have had a controller appointed, are in voluntary administration, are under a deed of company arrangement or are in liquidation)
  • whether you are regulated by the Australian Prudential Regulation Authority (APRA)
  • any related bodies corporate that are APRA regulated (including their Australian Company Number (ACN) and/or Australian Business Number (ABN)) and provide details of their APRA status (i.e. whether or not they are an authorised deposit-taking institution (ADI)), and whether any activities they undertake will be prevented by the licence cancellation
  • details of any outstanding financial statements (Form FS70) and auditor’s reports (Form FS71), and the reasons these are outstanding
  • if we hold a security bond, the details of the bond (i.e. the bond amount, the financial institution that issued the bond, the name of a contact person at the financial institution and their contact details, and the date of the security). You will also need to lodge a Form FS20 Change of details for an Australian financial services licence and provide lodgement details in your covering letter
  • your EDR scheme name and membership number
  • details of any dispute(s) (both internal and with an EDR scheme) that have not been fully resolved
  • whether you will accept notice of cancellation by email and, if so, a valid email address
  • a valid postal address for receipt of documents from ASIC.

Email the request for cancellation and the covering letter to Licensing.AFSLproofs@asic.gov.au. When we receive your request we will issue a fee invoice. We will not process the cancellation until the fee has been paid.

Alternatively, you can send the completed request for cancellation, along with the covering letter and a cheque for the relevant fee, by mail to:

Australian Securities and Investments Commission
Licensing
GPO Box 9827
Melbourne Vic 3001

For details of the fee, see Information Sheet 30 Fees for commonly lodged documents (INFO 30). The fee is listed under ‘Lodge a document under Ch 7 which does not have a fee specified elsewhere’ in the ‘Other financial services matters’ table under 'Financial services'.

What happens after we receive your cancellation request?

We assess your request to ensure that there are no outstanding matters that preclude cancellation of your licence.

To expedite this process, please complete all relevant areas of the request for cancellation.

We may cancel the licence subject to specified statutory obligations remaining in place. These obligations could include maintaining, for a specified period, EDR scheme membership and PI insurance.

Outstanding financial statements and auditor’s reports

Even though you have asked for the licence to be cancelled, you must still lodge financial statements (Form FS70) and an auditor’s report (Form FS71) for any financial year that ends before the date the licence is cancelled. Therefore, if your cancellation request is received towards the end of a financial year, the request may not be finalised until the next financial year, and you will need to lodge financial statements and an auditor’s report for a further financial year.

If circumstances prevent you from lodging any outstanding financial statements and auditor’s reports for any financial year, you should advise ASIC of these circumstances in the covering letter to your request for cancellation.

We will not generally process the cancellation until all outstanding lodgements are up to date.

What happens after we approve your cancellation request?

We will send you a letter when we have cancelled your licence and publish a notice of the cancellation in the ASIC Gazette.

Getting your security bond back when you cancel a licence

If you have satisfied current compensation requirements

Regulatory Guide 126 Compensation and insurance requirements for AFS licensees (RG 126) details the current arrangements for satisfying compensation requirements. Under previous arrangements, some licensees were required to lodge and maintain a security bond with ASIC. If you want to discharge a security bond because you have satisfied the current compensation requirements, you should complete question 5.2 on Form FS20 and lodge the form.

If you have not satisfied current compensation requirements

If you do not have compensation arrangements that meet the requirements of RG 126, to arrange release of your security bond you must:

  1. publish a notice containing the details set out in Form 702 Application for discharge of security (other than the information set out in 'Lodgement details' and 'Company details') in a daily newspaper of general circulation in Australia. Please note that:
    • at the end of the paragraph numbered one in the notice, you will need to replace the words 'dealers/investment advisers licence' with the words 'Australian financial services licence'
    • the reason shown in the paragraph numbered two in the notice must include a statement indicating that the security bond is no longer required because the AFS licence is being cancelled
    • if the financial services business was carried out solely in one state or territory, you may publish the notice in a daily local newspaper. However, if any of the financial services business was conducted in more than one state or territory, you should place the notice in either The Australian or The Australian Financial Review
  2. after you have published the notice, apply for the security to be discharged. The application should consist of the following:
    • a copy of Form FS20, with question 5.2 completed (see the guide attached to the form for the lodgement address)
    • an original or photocopy of the newspaper advertisement, clearly showing the date and newspaper in which the notice was published
    • a statement that to the best of your knowledge no person has, or is likely to have, a claim against the licensee for pecuniary loss due to the failure of the licensee, or an agent or employee of the licensee, to carry on business under the licence adequately or properly
    • if you have this information, the name of a contact person at the issuer of the security bond and their address details.

We will release the security bond at least three months after publication of the notice, if there have not been any claims made against it.

Read about how to make a claim against the security bond of an AFS licensee

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Last updated: 20/10/2014 12:00