If you carry on a business of providing financial services in Australia, you must hold an Australian Financial Services licence (AFS). This is necessary unless you are exempt or are authorized to provide those services as a representative of another person who holds an AFS licence.

More specifically, you will need to have your AFS licence or be a representative of a licensee from the day you start your financial services business. Most of the time, you will need financial services licenses if you provide financial product advice to clients, deal in a financial product, make a market for a financial product, provide a custodial or depository service, or even provide traditional trustee company services.

How can you get Financial Services Licences (AFS)?

An applicant for an AFS licence must complete an application consisting of form FSO1 and supporting core proof documents. Before starting to work on an application, an applicant must understand the business and understand which financial services and products are proposed to be provided and understand the obligations of an AFS licensee while having appropriate systems and processes.

Right now, the best way to apply for an AFS Licence is online using the eLicensing system. In order to get access to the online form, an applicant will need to register for the eLicensing system. This system individually tailors the application to your business. 

Nevertheless, with the proper assistance, you can ensure you are doing everything in the best way possible and therefore obtaining your AFS licence in less time. The latter is really important, considering that the length of time that an AFS licence takes to be approved will depend upon the completeness of the original application including the description of the applicant’s business and how quickly the applicant responds to requests for information from ASIC.

Also, to be eligible for AFS, which is one of the most popular options among financial services licences, your business needs to meet approved qualification and competency standards and/or have the practical experience and have sufficient financial resources to carry on the proposed business.

Besides this, you will need to meet certain obligations of an AFS licensee such as training, compliance, insurance, and dispute resolution. Fees will vary depending on your circumstances.

Five parts to the online application

Part 1: you enter your details as the applicant and the details of a contact person. Here you will also select the financial services and products that you want to be authorized to provide. In this part, you will provide answers to questions that describe your business.

Part 2: Here, you will be asked questions related to the obligations you will have as an AFS licensee and your ability to comply with them.

Part 3: Here, you will display where complex financial services or products have been selected in Part 1. Part 3 will include more detailed questions about those services.

Part 4: Here you will provide ASIC with declarations and certifications based on your answers in Parts 1 and 2.

Part 5: This will include the core proof documents to send as part of the application.

When you submit the form, you must immediately send ASIC:

● A scanned and signed print out of the form and copies of the proof documents; and

● A cheque by post if you haven’t already paid the application fee by BPAY.

What can we do for you?

The AFS is almost at the top of the most difficult financial licenses. That puts many people in a difficult position.

However, as usual, we have solutions for you. Two reputed licenses that are not as difficult nor expensive to obtain are the Malta and Cyprus licenses. Plus, they come with passporting rights across the EU.

The Maltese licence is reputable because Malta has a long-standing tradition of financial service providing. Plus, it is not as costly or as difficult as the AFS licence. Malta applies a four-tier system. Depending on the tier, you can undertake different activities. A tier-1 licence will allow you to provide investment services, tier-2 will allow you to hold and control clients’ assets, a tier-3 will allow you to deal on own account and to underwrite, and tier-4 will allow you to act as a custodian of an investment scheme.

Cyprus is a relatively new licencing jurisdiction that has gained popularity in the past few years because the process is swift, transparent, and not as expensive as in other European jurisdictions. The licence allows the provision of nine different financial services. The first four are:

● Reception and transmission of orders

● Execution of orders

● Portfolio management

● Investment advice

These only require a minimum capital of €125,000 if you hold clients’ funds and €50,000 if you don’t hold client funds.

The other five are:

● Dealing on own account

● Underwriting

● Placing of financial instruments

● Operation of a multilateral trading facility

● Operation of an organized trading facility

This will require a minimum capital of €730,000.

In Mundo, we work with experts in all the best financial jurisdictions in the world. We can help you obtain financial services licences in different destinations or any certification that improves your business’ profile, securely and easily. We create solutions for you depending on your specific business needs. Contact us right now!

Contact us