Australian Financial Services Licence（AFSL）

WHAT IS AFSL?

AFSL’s is abbreviation of Australian Financial Services Licence, An entity that provides financial services or a  financial institution regulated by ASIC in Australia must hold a valid Australian Financial Services License.

The Australian Securities and Investment Commission (ASIC) is the statutory regulator of financial services and markets in Australia. ASIC independently supervises companies, investment behaviours, financial products, financial services in accordance with Australian laws and regulations and supervise the Australian financial services industry to ensure the fairness and transparent of Australia’s financial market.

Being equipped with financial service license is a test for companies and a reliable guarantee for consumers’ rights and interests. When applying for AFSL, ASIC’s strict layer-by-layer review and the follow-up supervision of the three authorities, AUSTRAC, ASIC, and APRA make the application and holding of AFSL very challenging.

Do I need to apply for Australian AFSL?

If you need to engage in the following businesses in Australia, you are required by law to apply for an Australian financial license:

1. Superannuation, insurance in a broad sense
2. Basic deposit and payment products (including cash and non-cash payment products).
3. Financial trading institutions such as providing securities, Managed Investment Scheme, foreign exchange, and derivatives;
4. All practitioners involved in providing financial product advice or financial services.

Application Process

The financial services industry is regulated by ASIC, which issues AFSL to applicants under Section 911A of the Companies Act 2001. As part of its responsibilities, ASIC must assess an applicant’s application based on whether the applicant has the ability to:

1. Demonstrate the ability or qualification to provide the financial services specified in the application.​​
2. Prove sufficient financial resources are available to provide the proposed business service
3. Prove other obligations of AFSL licensees can be met (such as competence training requirements, compliance plan, professional indemnity insurance and gaining a membership of EDR).

Applicants must ensure that the information submitted is correct, complete and accurate in order to maintain the reliability of their applications and to accelerate the outcome of the assessment. After successfully obtaining a financial license, the licensee is obliged to provide efficient, honest and fair financial services under the conditions of its AFSL and the Companies Act 2001. Failure to comply with and maintain the warranties under the AFSL and the Companies Act 2001 will result in civil penalties or financial punishment.

Authorisations under the AFSL

• Providing financial product advice (personal and/or general);
• Dealing in financial products (including issuing and/or arranging);
• Making a market in financial products;
• Operate a registered scheme;
• Providing a custodial or depository service;

There are serious penalties and repercussions for operating without an AFSL or without the correct authorisations

If it’s unclear clear whether you need an AFSL, or which authorisations are appropriate for your business, we suggest you obtain formal legal advice from our lawyers.

How long does it take to get an AFSL?

The standard time frame is 6 months from the date the AFSL application is lodged with ASIC. However, more complicated business models (such as crypto or fintech) will usually take longer to assess so we advise clients to lodge the AFSL application as soon as possible.

Our Service

We will prepare a tailored compliance and risk framework for you to reflect your business and ensure you comply with your obligations; and assist you quickly obtain an AFSL and assist you keep your financial license on foot.

• Assessing the applicant’s current business model and structure of
• AFSL / ACL application and lodgement
• Drafting compliance policies and procedures
• Advice on legal and compliance obligations
• Identifying qualifications and relevant experience of nominated responsible manager/s
• Inhouse Compliance Officer Services
• Website Compliance Audit
• Assistance obtaining Professional Indemnity Insurance
• Drafting product disclosure statement (PDS) and financial service guide (FSG)

Disclaimer: This publication provides general information of an introductory nature and is not intended and should not be relied upon as a substitute for legal or other professional advice. While every care has been taken in the production of this publication, no legal responsibility or liability is accepted, warranted, or implied by the authors or our firm, and any liability is hereby expressly disclaimed.