06 Apr 2020

Changes to the Australian financial services licence (AFSL) application and variation process

As a result of recent amendments to the Corporations Act 2001 (Cth), ASIC recently updated AFSL application and variation requirements by reissuing Information Sheet 240.

There are two key significant updates.

Updates to individuals included as "Fit and proper persons"

ASIC is now required to assess a wider range of persons under the "fit and proper person" test set out in section 913BA of the Corporations Act when assessing applications for either a new or varied AFSL.

ASIC must now consider whether it has no reason to believe that the applicant, or any of the following persons, are not fit and proper to perform one or more of their functions:

  • any officers of a body corporate applicant
  • any partners or senior managers of a partnership applicant
  • any trustees or senior managers of a multiple trustee of a trust applicant.

ASIC will now also consider these persons against the fit and proper person test:

  • any controller of the applicant
  • if a controller is a body corporate, any officer of the controller
  • if a controller is a partnership, any partner or senior managers of the controller
  • if the controller is multiple trustees of a trust, any trustees or senior managers of the controller.

ASIC has provided a template for providing the required additional information for these persons. An applicant must also provide "people proofs" including a national criminal history check, bankruptcy check and a statement of personal information. In limited circumstances there may be an opportunity to provide ASIC with certification containing a subset of an applicant's fit and proper persons.

Providing additional non-core proof documents

If an applicant is intending to provide certain financial services and financial products, they must provide additional non-core proof documents at the time of application. These additional proof documents are set out in Information Sheet 240.

In addition, where an applicant has specified particular circumstances they may also be required to provide additional non-core proofs at the time of making the application. For example, where an applicant has indicated that it will outsource a relevant key activity it must provide a B3: Outsourcing Statement proof.

If you would like to discuss strategies to ensure compliance with the Australian licensing regime or require assistance with any application for relief or for an AFS licence, please contact us.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.