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3 Tips to obtain a limited Australian Financial Services Licence

Posted on July 27th, 2015 by Sophie Gerber in AFSLs

When applying for a limited Australian Financial Services Licence (AFSL) it is important to understand the Australian Securities and Investments Commission’s (ASIC) requirements and have the appropriate documents prepared.

  1. Ensure your Responsible Manager has the right qualifications

If you are applying for your limited AFSL before 1 July 2016 and your Responsible Manager is a recognised accountant, you will only need to provide ASIC with proof of the Responsible Manager’s relevant knowledge or qualifications.

A recognised accountant is a person who:

  • holds a Certificate of Public Practice issued by the Chartered Accountants Australia and New Zealand; or
  • holds a Public Practice Certificate issued by CPA Australia Ltd or the Institute of Public Accountants.

Make sure you have copies of your certificates in electronic form and are able to provide evidence of your up-to-date membership with one of these bodies.

 

  1. Be adequately capitalised

Ensure you can provide evidence of adequate financial resources, or be ready to do so when ASIC requests proof of this.

Financial documents required by ASIC include:

  • Cash flow projections for the next three months
  • A current balance sheet
  • Profit and loss statements for the latest financial year

 

  1. Speak to your external service providers

Your cash flows are an important part of your application and will need to accurately reflect that you have budgeted for all the items you need to keep your limited AFSL running. Ensure you have quotes for the following:

  • auditor
  • FOS membership
  • PI insurance

Prior to obtaining your final licence, you will need to give ASIC a copy of your PI insurance certificate of currency and your Financial Ombudsman Service (FOS) membership certificate, so ensure you have contacted these providers early on in the application process.

Sophie Gerber

Sophie is the director of both Sophie Grace Legal Pty Ltd and Sophie Grace Pty Ltd. Sophie has worked with some of Australia’s largest financial services organisations in compliance, legal and operational roles. She has also worked with small businesses to provide tailored solutions with a strong understanding of business practicalities as well as obligations to regulators.