ASIC announces new reporting requirements for AFS licenses

Rick Steves

ASIC has disclosed to which AFS licensees the new reporting regime applies.

ASIC has announced new financial reporting requirements for Australian financial services (AFS) licensees, following changes to the accounting standards.

AFS licensees’ financial reports now must contain disclosures consistent with the financial reports of other for-profit entities, prepared under standards set by the Australian Accounting Standards Board (AASB).

‘These reporting changes will assist those who prepare financial reports under both sets of requirements, and provide relevant information for ASIC’s surveillances of licensees and for other users of financial reports”, said ASIC Commissioner Sean Hughes.

New reporting regime applies to these licensees

From financial years commencing 1 July 2021, for-profit companies can no longer prepare special purpose financial reports (SPFRs) that do not contain all disclosures required in the full accounting standards.

Accounting standards instead allow entities that do not have public accountability to use a simplified disclosure regime. Entities that have public accountability must comply with the disclosure requirements of the full standards. All entities must apply the full recognition and measurement requirements for assets, liabilities, income and expenses.

ASIC announced the AASB’s new reporting regime will apply for the Chapter 7 financial reports of most AFS licensees, using the public accountability test, including:

regulated by the Australian Prudential Regulatory Authority;
participants in a licensed market;
participants in a clearing and settlement facility;
retail over-the-counter derivative issuers;
wholesale electricity dealers;
corporate advisors that deal in financial products;
over-the-counter derivative traders;
wholesale trustees;
responsible entities of a registered scheme;
corporate directors of a corporate collective investment vehicle;
providers of a custodial or depository service;
operators of an investor directed portfolio service.

All licensees will be required to prepare a cash flow statement. In addition to single entity financial statements, consolidated financial statements must be presented where the licensee has controlled entities.

The new disclosure requirements apply from financial years commencing on or after 1 July 2021, but many licensees can choose to defer any new disclosure requirements by one year, the financial watchdog informed, adding that AFS licensees that prepared SPFRs last year, and that do not prepare reports under Chapter 2M, can choose to defer the new disclosure requirements to financial years commencing on or after 1 July 2022.

The changes will be given legal effect through the certification section of the prescribed ASIC Form FS 70 Australian financial services licensee profit and loss statement and balance sheet.

ASIC will make the revised form available in late June 2022.

Read this next

Retail FX

eToro valuation halved as SPAC merger deadline expires

The deadline for the completion of the SPAC merger of eToro had passed yesterday, June 30, and the Israeli broker apparently canceled the deal with Betsy Cohen-backed blank-check firm.

Institutional FX

FXSpotStream reports second best figure for monthly volumes

Trading volumes on institutional FX platforms surged in June after fears over the impact of Russia’s military invasion of Ukraine sent speculative asset classes reeling.

Retail FX

Vantage expands MT5 offering with access to new stocks

ASIC-regulated foreign exchange brokerage Vantage has expanded its service offering and trading products by incorporating new markets, namely 14 exchange-based stocks on MetaTrader 5.

Digital Assets

CFTC charges $1.7 billion Bitcoin scam, largest to date

Mirror Trading accepted at least 29,421 Bitcoin from approximately 23,000 investors from the United States and even more throughout the world.

Retail FX

Spotware Systems upgrades cTrader Desktop to version 4.3

Spotware Systems, a technology provider for the electronic trading industry, has launched an updated version of its cTrader Desktop, which adds new functionality to join a roster of advanced trading capabilities.

Digital Assets

OKX launches Block Trading for tighter pricing

With Block Trading, users can integrate spot and derivatives trades on the same platform and trade multiple currencies in a single trade. The service supports trading of perpetual swap, futures, and option contracts with popular altcoins as the underlying.

Industry News

Interactive Brokers pays $1 million to settle with CFTC

Interactive Brokers overcharged its customers a total of $710,828.14.

Metaverse Gaming NFT

DappRadar launches cross-chain token staking

The launch of the cross-chain token staking mechanism by DappRadar comes under a partnership with LayerZero protocol, which enables smart contracts to communicate across different chains.

Digital Assets

Polkadot releases one-stop marketplace for Substrate pallets

Proof-of-stake blockchain Polkadot has achieved a significant feat in its development, as it rolls out Substrate Marketplace, a one-stop shop for exploring the many Substrate pallets currently available.