Generally, there are three manners for you to “get” an AFS Licence to conduct financial services businesses in Australia. Each method involves considerations regarding cost and time efficiency as well as your own unique business development plan.

1.Application for an AFS Licence

Australian Securities & Investments Commission (“ASIC”) assesses applications for AFS Licences as part of its role as regulator of the financial services industry. In its assessment, ASIC considers whether you have the competency and financial resources. In addition, you must be able to meet other obligations such as training, compliance and dispute resolution.

In order to be successful in your application for an AFS Licence, responsible managers (“RMs”) play a crucial role. Therefore, in your planning/application stage, we strongly recommend finalising your employment arrangements with the RMs.

2.Corporate/Individual Authorisation

This method involves an agreement with a current AFS Licensee followed by a lodgement with ASIC to update the financial services register. Upon successful lodgement, you will be authorised to provide the relevant financial services. As with all private agreements, negotiations play a significant role in the shaping of your agreement with a current AFS Licence holder.

Key items such as reporting obligations, data management, compliance arrangements and risk management must be emphasised so as to ensure an ongoing cooperative relationship between the parties.

3.Acquiring/Purchasing an AFS Licence HolderThis method often involves the acquisition of shares in an AFS Licensee (whether directly or as the ultimate holding company). Apart from being interested in authorisations under the target AFS Licence holder, you must consider the assets and liabilities as well as the current obligations and responsibilities of the target company. It is pertinent that you conduct due diligence checks to determine your risks as the proposed new owner of the target company.

If there is an opportunity in the future, we will talk about the procedures, requirements and risks in each method.