1. Ensure you have the right Responsible Manager. ASIC has strict criteria for appointing a Responsible Manager (RM) on your AFSL. You cannot obtain an AFSL without a RM.
The RM you nominate needs to have the required qualifications and experience and generally they cannot be an existing RM on more than one other AFSL. In most circumstances, the experience requirements include:
* 3 out of the past 5 years’ experience working for an AFSL that contains the authorisations you are looking to obtain; or
* 5 out of the past 8 years’ experience working for an AFSL that contains the authorisations you are looking to obtain.
The qualification requirements include:
* your nominated RM holding an appropriate tertiary qualification to at least a Diploma level;
* for a retail AFSL, the RM also needs to have had RG146 for the duration of their relevant experience in the products you are seeking.
Additional requirements apply for retail AFSLs that will provide personal advice, including the RM having passed the financial adviser exam.
Sophie Grace is able to provide feedback very quickly based on a candidate’s CV regarding whether they might be suitable to nominate as a RM and what type of AFSL they can assist you to obtain. Alternatively, we have contacts who are able to perform this role for your business if you are unable to source someone internally.
2. Be adequately capitalised. Or ready to be so when ASIC requests proof of this. This might mean you need to inject additional capital or obtain a director or shareholder loan. Evidence of capitalisation is generally a bank statement in the name of the applicant entity along with the lodged form evidencing the injection of capital.
3. Prepare your cash flows. an important part of your application is making sure you have budgeted for all of the items you’ll need to keep your AFSL running and demonstrating this to ASIC. This needs to align with the activities you are planning to undertake. To that end, make sure you have quotes for the below relevant items to incorporate:
* auditor (compulsory for all AFSLs)
* PI insurance (compulsory for retail AFSLs)
* AFCA membership (retail AFSLs only)
* trustee/administrator/registry/custodian (for funds management / Managed Investment Schemes (MISs))
You’ll also need to be aware of the financial requirements that apply to your business. ASIC’s Regulatory Guide 166 explains these and we can assist you to understand which requirements will apply to your particular business and AFSL authorisations.
4. Make sure your proof documents align. Be careful if you are using documents obtained from a variety of sources. The business you are describing to ASIC needs to align across each of the documents. The documents also need to show that you are aware of the regulatory requirements applicable to the type of business you intend to operate. Having a professional firm such as Sophie Grace prepare or review your application will ensure that you don’t present incorrect documents to ASIC which will slow the progress of your application.