ASIC changes assessment procedure for AFS licence applications of FX companies

Maria Nikolova

Certain applicants, including companies that intend to offer Forex contracts, are required to provide additional information and documents as part of their application.

The Australian Securities & Investments Commission (ASIC) has changed its Australian financial services (AFS) licensing assessment procedures for certain applicants and has earlier today provided guidance on the new requirements.

Information Sheet 240 AFS licensing – Requirements for certain applicants to provide further information (INFO 240) outlines changes that apply to applicants that are a body corporate; applicants that are Australian Prudential Regulation Authority-regulated bodies; and applicants that are proposing to offer certain financial services or to operate in specific circumstances, and are required to provide additional information to ASIC.

Let’s note that the list of applicants that are proposing to offer certain financial services or to operate in specific circumstances includes companies that intend to offer foreign exchange (Forex) contracts. These entities will have to submit:

  • C5: Foreign Exchange Operating Statement
  • B3: Arrangements for Managing Conflicts of Interests
  • B3: Compliance Arrangements
  • B7: Risk Management System Statement.

The entities that intend to offer derivatives have to provide the following additional non-core proofs:

  • C4: Derivatives Statement
  • B3: Arrangements for Managing Conflicts of Interests
  • B3: Compliance Arrangements
  • B7: Risk Management System Statement.

This will enable ASIC to ascertain whether it has reason to believe an applicant is likely to contravene its legislative obligations, including to deliver financial services ‘efficiently, honestly and fairly’ and to ensure that the responsible officers of a body corporate applicant are of good fame or character.

ASIC Executive Director – Assessment & Intelligence Warren Day said, ‘ASIC has reviewed the AFS licence assessment processes and has streamlined its assessment processes in some limited respects. This is designed to avoid unnecessary delays that may arise when ASIC seeks additional information during an assessment.’

ASIC is currently developing a new regulatory portal that will include a new AFS licence application platform. Until this is implemented, ASIC continues to use its existing AFS licence platform.

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