Not all fin services companies need AFS licences: lawyer
Financial services firms concerned about compliance may be better off sharing a licence with other parts of the business, a specialist lawyer says.
While many businesses offering financial services may believe they need their own Australian Financial Services (AFS) licence, this is not necessarily the case, according to The Fold’s senior lawyer, Jaime Lumsden Kelly.
Firms can elect to each carry their own licence or choose one entity to hold the licence and appoint other parts of the business authorised representatives, she said.
“The thing to consider with (the latter) option is which company should hold the licence,” Lumsden Kelly says.
“A holding company that does not itself provide financial services may be a good choice, but it’s not the only alternative.
“When making a decision, you need to be mindful of the fact that the entity that holds the licence will need to undertake monthly cash flow forecasts. They also need to obtain all the authorisations needed for all the financial services offered throughout the group.”
Lumsden Kelly said AFS licences can be a complicated area and companies who are confused should seek legal advice.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
