Running a financial advice business

AFS licensee obligations

Australian financial services (AFS) licensees have a general obligation to provide efficient, honest and fair financial services. You must comply with the conditions of your AFS licence and the Corporations Act 2001.

Limited AFS licensees

'Limited AFS licensees' are individuals, companies and any other firms that hold an AFS licence that authorises them to provide only one or more limited financial services.

Reference checking

AFS licensees must comply with reference checking and information sharing obligations in relation to an individual seeking to be employed or authorised as a financial adviser.

Dispute resolution

Financial firms must have a dispute resolution system that consists of:

  • internal dispute resolution (IDR) procedures that meet the standards or requirements made or approved by ASIC; and
  • membership of the Australian Financial Complaints Authority (AFCA).

ASIC Regulatory Guide 267 Oversight of the Australian Financial Complaints Authority (RG 267) sets out who must have a dispute resolution system and which financial firms must be members of AFCA.

Reportable situations (previously breach reporting)

From 1 October 2021, Australian financial services (AFS) licensees and Australian credit licensees are required to submit notifications about ‘reportable situations’ (previously breach reports) to ASIC within 30 calendar days (no longer 10 days) via the ASIC Regulatory Portal generally.

Appointing and ceasing an AFS authorised representative

An AFS licensee may appoint ‘authorised representatives’ to provide specified financial services on its behalf.

 

Giving AFS licensees information about their representatives

ASIC may give information about a representative to a licensee to help them make informed decisions about their representatives and appropriately monitor their conduct.

Relief from financial services provisions

ASIC has discretionary powers to grant relief (i.e. by exemption or declaration) from certain legislative provisions. There are three types of applications for relief—standard applications, minor and technical applications and new policy applications.

Industry funding

The Government's industry funding arrangements for ASIC became law in 2017.

This was the first year of the new regime where ASIC will recover most of its regulatory costs from regulated industries.

Industry funding was a key recommendation in the 2014 Murray Financial System Inquiry.

Developing the model was a substantial undertaking with a high level of robust engagement from industry sectors throughout the Government's consultation process.

For more information, see ASIC industry funding.

Lodging annual financial statements

Although all companies should keep financial records to ensure they understand how their operations are faring, some types of companies need to keep these records for the purposes of preparing and lodging financial reports with us.

Generally, companies must lodge reports where:

  • there are substantial sums of money involved
  • the general public has invested funds with the company, or
  • the company exists for charitable purposes only and is not intended to make a profit. See charities registered with the ACNC if your company is a charity registered with the Australian Charities and Not-for-Profits Commission.

For more information, see Information Sheet 31 Lodgement of financial reports (INFO 31).

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ASIC industry funding

Last updated: 07/12/2021 10:36