5 Tips to consider when you apply for an Australian Financial Services License (1)

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5 Tips To Consider When You Apply For An
Australian Financial Services License

• Getting an Australian Financial Services License
  could be a challenge. Through the years I've
  observed that lots of applicants have been
  declined or rejected by ASIC, or find themselves
  struggling to conform after being licensed
  because they have not considered the effect of
  the license obligations. Listed below are some
  essential questions that you ought to consider
  before you apply for a license.

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1. Have you evaluated your business model to look
for the type of AFS License you'll need?

• It is very important take a look at business
  structure and compare it to the kind of license
  that ASIC will issue. Your conformity
  obligations, which is detailed on your own
  licence, will also be prescribed within the
  Corporations Regulations. These will vary based
  on the authorizations in your Licence. For
  instance The financial obligations of the
  license could be more onerous if you plan to
  hold clients money or You will be subject to
  much more onerous conformity obligations if you
  plan to use handled discretionary accounts.In
  case you make an application for authorizations
  that you don't need, or even dont need yet, you
  still have to spend some time and money to
  conform with the conditions regarding those
  unnecessary authorizations. But, in case you
  dont make an application for the authorizations
  that you simply do have to operate your planned
  business, you can face ASIC action to get rid of
  or suspend your license.

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2. Are you conscious of the costs of obtaining
and sustaining a license?

• Several potential applicants think that the only
  real cost of receiving a license will be the
  initial application fee and also the cost of PI
  Insurance. However, there are a variety of
  additional fees that should be considered when
  evaluating the cost of receiving a license versus
  the price of remaining authorized by a
  preexisting licensee. These could include
• Membership of the external dispute resolution
  program (only when you've retail clients)
• Ongoing price of the audit by the registered
  company auditor which handles financial as well
  as compliance audits
• Cost of creating, implementing and looking
  after compliance systems and procedures
• Annual price of lodging documents as well as
  auditors report
• Maintaining information on your advisers on
  ASICs register of Financial Advisers
• Ongoing training of the accountable managers
  and advisers

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3. How do you propose to carry out your business?

• While using appropriate structure can also be
  important. Like a licensee you'll be subject to
  ongoing financial needs. Such as a necessity to
  possess sufficient financial resources to fulfill
  your anticipated cash flow costs and be solvent.
  There might be some other financial requirements,
  based on the business you want to conduct. It may
  quite challenge ascertain this, so you may wish
  to consult another compliance consultant to offer
  advice.
• The amount of financial requirement imposed gets
  to be more onerous based upon the kind of
  financial services business, you intend to
  operate, for instance, if you wish to be a fund
  manager various financial requirements utilize
  depending regardless of whether you decide to
  have retail or perhaps wholesale investors. These
  financial requirements are licence circumstances
  and will be susceptible to an audit from your
  registered business auditor.
• It is very important get yourself a licence
  utilizing a vehicle that isn't likely to be
  impacted by any other businesses within your
  group. There has been several licensees who've
  cancelled their AFSL licence right after it was
  issued simply because they found that these were
  performing other business which directly impacted
  the financial conditions imposed around the
  Licence.

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4. Do you've adequate responsible managers who
fulfill the organizational competencies?

• Among the important aspects in receiving an AFS
  Licence is to show you've senior people who
  satisfy the competencies since the licence
  authorization that you have applied. Here is the
  critical area of the application and one which in
  turn causes the majority of the delays in
  assessing a credit card application.
• It is most significant how the persons selected
  as responsible managers have both skills and
  knowledge covering all the authorization
  requested and that they are directly accountable
  for the day-to-day decisions from the proposed
  licensee. When applications depend on
  professional responsible managers, ASIC right
  now asks in-depth inquiries to check their
  proposed roles as well as responsibilities. This
  could significantly delay an application, or even
  the application might be unsuccessful.

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• In which the applicant is a small business asking
  for less complex authorizations it's possible
  that certain responsible manager is enough.
  However, more complicated licence authorizations,
  where a candidate intends to to experience a
  broad range of financial services, may need
  several responsible managers.
• While preparing the Licence application, it is
  crucial that each one of the responsible managers
  very careful detail their particular experience
  that is highly relevant to the authorization
  which is why they've been nominated.

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5. Do you will find the same time and the support
to build up the documentation and procedures
essential to submit a Licence application and
also to comply?

• An essential question is regardless of whether
  you have time to understand info ASIC requires
  and make preparations all the documentation
  required to obtain a license. From my notice a
  high number of applications listed in ASIC are
  rejected since the documentation submitted is
  insufficient.
• ASIC needs particular documentation to become
  submitted using the application (known as core
  proofs) but reserves the authority to request
  some other documentation to become submitted
  included in the assessment (non-core proofs).
  Occasionally, ASIC may request explanations where
  the details are unclear, so its vital that you
  have well crafted, concise applications.

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• ASIC provides some guidance for assistance with
  preparing these types of documents. However,
  these will have to be reviewed with an ongoing
  basis because the laws change as well as
  businesses grow and also evolve.
• In addition to the licence application, you have
  to consider regardless of whether you have the
  time and expertise to build up your compliance
  documents. In case you dont, you might want
  engaging another compliance consultant,
  especially if your organization is small and it
  seems sensible to outsource.
• Bear in mind because you have to comply once you
  receive your licence, even though you haven't yet
  commenced business.
• Get help from - https//knowcompliance.com.au/unca
  tegorized/australian-financial-services-licence-ap
  plications-5-tips-to-consider/

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