So, you’ve had a successful ASFL application, and you now hold your AFS Licence. Congratulations! 

But the hard work isn’t over, as ASIC maintains strict guidelines for AFS licence holders regarding their reporting and compliance obligations. In this article, we’re going to run through your general AFSL obligations as an AFS licensee, as well as how to vary an AFSL when necessary to remain compliant. 

Please note that the following information does not constitute legal advice. If you are unsure about your compliance with your specific AFS licence requirements or require AFSL application assistance to vary an AFSL to remain compliant, please contact us for assured AFSL legal advice. 

Your General AFSL Obligations

According to the Corporations Act 2001, the general obligations of AFS Licence holders are as follows: 

1. You provide efficient, honest, and fair financial services. 
2. You comply with all financial services laws.
3. You maintain the necessary competence to provide financial services.
4. You maintain minimum financial obligations, such as sufficient cash flow. 
5. You comply with the conditions on your AFS licence.
6. Your representatives comply with all financial services laws. 
7. Your representatives are competent and adequately trained.
8. You comply with ASIC’s reference checking and information-sharing protocol.
9. You have adequate financial, technological and human resources to provide the services covered by your licence, and to carry out supervisory arrangements.
10. You have adequate arrangements to manage conflicts of interest.
11. You have a dispute resolution system which includes being a member of an external ASIC-approved scheme (if you have retail clients) 
12. You have adequate risk management systems in place.
13. You maintain appropriate professional indemnity insurance.
14. You appoint an ASIC-approved auditor.

AFSL Variations: How to Vary an AFSL to Remain Compliant

In order to remain compliant, you must notify ASIC of changes to your AFS licence. Some administrative details can be changed via a simple form, while others will require a new AFSL application. 

Some changes that you must tell ASIC about include: 

• You change control of the AFS Licence
• If your business details change, such as contact details or a change of your AFSL responsible manager.
• You appoint an auditor
• If your financial advisors comply or fail to comply with professional standards.

In some instances, changes to your financial services business will require an AFSL variation, which is a new AFSL application process. CNM Legal is highly experienced in AFSL variations and applications. 

In Doubt? Get AFSL Legal Advice

ASIC will suspend or cancel your AFSL or impose extra conditions on your licence if you fail to meet your obligations. It is imperative that you establish and maintain impeccable record-keeping and reporting systems to ensure that you remain compliant with the obligations set out in the Corporations Act 2001. 

We strongly recommend getting AFSL legal advice if any aspect of your business has changed or you need AFSL application assistance to remain compliant. Please contact us for a no-obligation chat.