In order to conduct financial services businesses in Australia, you are required to hold an Australian Financial Services Licence (“AFS Licence”). Your entity may be:

  • 1.Providing financial product advice;
  • 2.Dealing in financial products;
  • 3.Making a market in financial products;
  • 4.Operating a registered scheme;
  • 5.Providing a custodial or depository service;
  • 6.Providing traditional trustee company services;
  • 7.Providing a crowd-funding service.

Financial products may be generally defined as products through which a person:

(a) Makes a financial investment;

(b) Manages a financial risk;

(c) Makes non-cash payment.

To provide a better context, your entity could be providing financial product advice involving classes of financial products such as basic deposit and payment products (cash and non-cash), securities, managed investment schemes (registered or unregistered), derivatives, foreign exchange contracts, government bonds, margin lending facilities and insurance (life and general insurance).

Apart from the above, Chapter 7 of the Corporations Act provides for exclusions. For example, products that are issued or offered for regulated sale by an exempt body or an exempt public authority do not require your entity to hold an AFS Licence.

The Corporations Act is complex to navigate and where you are unsure whether you are required to hold an AFS Licence or which authorisations apply to your business, we recommend approaching a legal advisor for a discussion.