This Gateway provides an overview of how financial services businesses are regulated in Australia. It outlines the registration and licensing requirements you may need to complete before operating a financial business in Australia.
Australian licences and registration differ depending on the business entity. One of the key decisions you will make before applying is your business structure.
Licences and registrations are not transferrable between legal entities, so you will need to make this decision before applying for licences and registrations.
In providing financial services in Australia, you may require more than one type of licence from more than one regulator depending on the nature of your business. This guide covers 5 major categories to demonstrate common licensing Gateways:
It is not intended to cover all possibilities. More than one of these Gateways may apply to your intended business.
Financial services regulation is technical and complex. This Gateway is intended to act as a starting point to assist you in finding the relevant information and to give you a starting point for discussion with advisors. This Gateway does not eliminate the need for professional advice and it is strongly recommended that you engage service providers to advise you on legal, compliance and tax matters.
This Gateway will guide you to the websites of the major regulators. Take the time to explore those sites thoroughly for more detailed information on requirements and regulation.
You may operate a financial service business under a number of different business structures. Business structures available in Australia include companies (the most common type), trusts, joint ventures, partnerships and sole traders. There are different legal and taxation requirements for different business structures. The regulations for particular financial services may require you to use a certain structure. Your legal adviser will assist you to determine the most appropriate structure for your situation.
Whether a business is 'carrying on business' in Australia will depend on certain legal principles and on the specific circumstances of the business. Where a business is in any doubt as to whether it may be ‘carrying on business’ in Australia it should seek legal advice.
ASIC has prepared "Regulatory Guides 121 Doing financial services business in Australia" to assist people or companies from overseas who propose to conduct a financial services business in Australia.
Read ASIC RG121 Doing financial services business in Australia
Applications to register an Australian company can be made through a number of service providers including accountants, lawyers and other advisers.
Read more about registering an Australian company on ASIC's website Read more about company names and use of company numbers in ASIC Regulatory Guide 13 ACN, ARBN and company namesA foreign company wishing to carry on business in Australia must be registered under Part 5B.2 of the Corporations Act 2001.
A foreign company is an incorporated body that is formed in an external territory of Australia or outside Australia. Some unincorporated bodies are also treated as a foreign company.
Once registered in Australia, foreign companies are required to lodge copies of financial statements with ASIC and notify ASIC when particular company details change.
Read about registering a foreign company on ASIC’s website
Applying for authorisation
Overview
How to apply
This Gateway includes information on the requirements for deposit-takers and lenders, credit card issuers, purchased payment providers and some of the activities commonly undertaken by retail banks, commercial banks, credit unions, and building societies. Information relevant for investment banking activities is included in the General Financial Services Gateway.
Banking business includes taking deposits (other than in part-payment for goods or services) and making advances of money or other activities prescribed by regulations made under the Banking Act 1959.
An institution granted authority to operate a banking business in Australia is known as an Authorised Deposit-taking Institution (ADI). ADIs include banks, building societies and credit unions.
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of ADIs. APRA also regulates foreign banks licenced to operate through a branch in Australia, credit card issuers and purchased payment facilities.
Banks are also regulated by Australian Securities and Investments Commission (ASIC) and an Australian financial services licence (AFS licence) may be required (see Step 2). For consumer credit providers, an Australian credit licence may also be required (see Step 3).
To use certain restricted terms such as 'bank', 'banking', 'ADI', 'merchant bank' and 'offshore banking unit' requires separate consent by APRA.
Credit card issuing and/or acquiring a business in Australia as a ‘specialist credit card institution’ also requires authorisation by APRA.
Providers of purchased payment facilities also require authorisation by APRA.
Only companies can be authorised by APRA to carry on banking business in Australia.
Foreign banks may apply to establish Australian-incorporated subsidiaries or to operate as an authorised branch operation of the foreign bank (the latter known as foreign ADIs). Foreign ADIs can engage in the full range of banking business but are prevented from accepting initial deposits and other funds of less than AUD 250,000.
A foreign bank may establish an Australian Representative Office (RO) to provide liaison services to Australian customers in relation to its offshore banking services. Establishing an RO requires consent from APRA and conduct of RO subject to restrictions.
Read more about ROsTo be authorised as an ADI, a banking business must meet requirements relating to capital, ownership, governance, risk management and internal control, compliance, information and accounting systems, external and internal audit and supervision by home supervisor. Once authorised, ADIs must meet prudential requirements on an on-going basis.
Read more about the prudential standards Read APRA's Prudential Practice Guides and other GuidelinesADIs are required, under the Financial Sector (Collection of Data) Act 2001 (FSCODA), to provide data to APRA. Data requirements are defined in the Reporting Standards established under FSCODA and their accompanying reporting forms and instructions.
Registered financial corporations and general insurance intermediaries, while not prudentially regulated by APRA, may also need to provide data to APRA. Read more about FSCODA reporting
APRA encourages applicants to meet with them early in the authorisation process. Each applicant is assigned a supervisor who is their main contact for all APRA-related matters.
The application process involves the following steps:
Approval may be contingent on other relevant approvals being granted including Financial Sector (Shareholdings) Act 1998 , the Foreign Investment and Takeovers Act 1975, and an AFS licence (see Step 2).
Read APRA ADI Authorisation Guidelines on the application process
The timetable for the authorisation process depends on the complexity and completeness of the material provided to APRA, and the applicant’s ability to meet APRA’s requirements from day one. Generally, the overall authorisation process takes from three to twelve months.
APRA charges a licensing fee payable at commencement of the application process and an annual supervisory levy.
Read more about application charges for authorisation as an ADI Read more about application charges for foreign bank representative office Read more about annual supervisory levy changes