What is the AFSL application process?

An AFSL application often represents a defining moment for a business which either needs an AFSL to commence operations or scale beyond what is currently possible under an authorised representative arrangement.

Applicants only have 1 chance to get an AFSL application right. Getting it wrong (or not in the form preferred by ASIC) will usually result in the application being rejected or its assessment delayed.

There are 3 key steps which are critical to maximising the chances of an AFSL application being approved. We have set these out below.

1. AFSL Authorisations

A business is permitted to provide the types of financial services covered by the authorisations contained in its AFSL. The type of AFSL authorisations required will differ for each company and depends on the activities and operations of the business. This requires a consideration of:

• the type of financial products the business will work with.
• the type of financial services the business will provide to clients (i.e. advice, dealing, custody).
• whether the financial service will be provided to retail or wholesale clients.

We advise clients on the authorisations required to operate their business and whether any amendments to the business are required to avoid or mitigate any additional legal and compliance obligations that would otherwise arise.

2. Choosing Responsible Managers

An applicant must nominate at least 1 Responsible Manager when submitting an AFSL application. A Responsible Manager is responsible for the financial services provided by the AFSL holder and must have appropriate skills and experience in the authorisations sought in the AFSL application.

For example – the Responsible Manager would need to have appropriate experience in both the financial service and underlying financial products that comprise the authorisations sought under the AFSL application.

We vet Responsible Managers to determine whether they are appropriate and will be accepted by ASIC and have a large network of ‘RMs for hire’ who provide their services to companies on a consultancy basis.

3. Draft AFSL Application Proofs

In addition to the AFSL Application Form (FS01), applicants are required to submit ‘core proof’ documents which are the documents that ASIC considers as part of its assessment of whether to grant an AFSL.

The core proof documents required will depend on the AFSL authorisations sought. However the following core proof documents will need to be prepared at a minimum:

• Business Description Proof (A5), which sets out details of the proposed business.
• Organisational Competence Proof (B1), which sets out each Responsible Manager’s skills and experience and highlights how they are relevant to the authorisations sought.
• Financial Resources Proof (B5), which documents the financial position and performance of the business and evidences how it satisfies the financial resource requirements that apply to the applicant.

We prepare core and additional proofs to ensure they are in the form preferred by ASIC and maximise the chances of obtaining an AFSL in the shortest period of time.