Understanding Australian Financial Services Licensing ( AFSL) in Australia

In Australia you must hold an AFS license to conduct a financial services business. Essentially an AFSL  is an authorisation granted by the Australian Securities and Invesmsnt Commissions ( ASIC) permitting businesses to offer financial services to clients in Australia.

An AFS licence authorises you and your representatives to provide financial services to clients.

You provide financial services if you:

• provide financial product advice to clients for example, giving a recommendation to clients or the general public about which financial product they should purchase.
• deal in a financial product for example, buying or selling shares on behalf of a client or issuing interests in a managed investment scheme.
• make a market for a financial product for example, where you regularly quote prices at which people can buy or sell financial products.
• operate a registered managed investment scheme. ASIC is also required to register managed investment schemes that are offered to retail clients.
• provide a custodial or depository service for example, holding a financial product, or a beneficial interest in a financial product on trust for a client
• provide traditional trustee company services for example, preparing estate management functions
• provide a crowd funding service
• provide a superannuation trustee service
• provide a claims handling and settling service, or
• operate the business and conduct the affairs of a corporate collective investment vehicle (CCIV).

Financial products include things such as shares, bonds, superannuation, interests in managed investment schemes, life insurance, general insurance, derivatives and margin lending facilities.

There are a range of obligations that come with holding an AFS License, including financial obligations and enhanced educational and competence requirements. One of the most important obligations of any office who is granted an AFSL license authority, is to provide efficient, honest and fair financial services, complying with license conditions and the Corporations Act 2001. 

The AFS licensing and financial services environment has undergone significant changes in the last few years arguably, as a result of the Royal Commission and subsequent Recommendations issued. Novus has an experienced team of legal and professional officers who are able to assist in not only the understanding AFS licensing, but providing an issuing such license authorisations.