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

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

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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. – PowerPoint PPT presentation

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


1
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.

2
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.

3
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

4
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.

5
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/

9
Contact US
  • Contact Number
  • 1300 559 392
  • 0417 460 236
  • Fax 1300 857 881
  • Email info_at_financialadvisersdealergroup.com.au
  • The Australian Dealer Group Pty LTD
  • Level 3 31/240 Plenty RdBundoora VIC 3083,
    Australia
  • https//financialadvisersdealergroup.com.au/
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