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
Apply for authorisation
Overview
How to apply for authorisation as a general insurer
How to apply for registration as a life insurer
Insurers are regulated by both the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). General insurers and life insurers must be authorised by APRA and all insurers may need to obtain an Australian financial services licence (AFS licence) from ASIC (see Step 2).
Life insurance involves the issue of a life policy or undertaking the liability under a life policy. It excludes businesses that are merely collecting premiums or making payments due under a life policy.
All other insurance business is known as general insurance.
APRA supervises general insurers under the Insurance Act 1973 and Insurance Regulations 2002. General insurance intermediaries are not supervised by APRA but may have reporting requirements.
APRA supervises life insurers (and friendly societies) under the Life Insurance Act 1995 and Life Insurance Regulations 1995.
All insurance businesses must be structured as companies.
APRA's prudential framework for general insurance business comprises the Insurance Act 1973 and Insurance Regulations 2002, general insurance prudential standards, prudential practice guides, authorisation guidelines and reporting standards.
General insurers are required to meet capital adequacy, risk management, business continuity, reinsurance management, outsourcing, audit and actuarial reporting, governance, and "fit and proper" standards.
APRA's prudential framework for life insurance businesses comprises the Life Insurance Act 1995 and Life Insurance Regulations 1995, life insurance prudential standards, prudential rules, prudential practice guides, registration guidelines and reporting standards.
Life insurers are required to meet prudential capital, valuation, solvency, investment performance guarantees, management capital, statutory funds, risk management, business continuity, reinsurance, outsourcing, audit and actuarial reporting, governance, and "fit and proper" standards.
Insurers are required to submit data to APRA in accordance with the reporting standards under the Financial Sector (Collection of Data) Act 1998, including for the National Claims and Policies Database.
While not prudentially regulated by APRA, general insurance intermediaries may also need to provide data to APRA.
Read about reporting requirements for general insurance businesses Read about reporting requirements for General Insurance Intermediaries Read about reporting requirements for Life InsurersAPRA's authorisation process is consultative and each applicant is assigned a supervisor who is their main contact for all APRA-related matters. APRA encourages applicants to meet with them earlier in the process and you may contact APRA through their website.
The application process involves the following steps:
Approval of the application may be contingent on other relevant approvals being granted under the Insurance Acquisitions and Takeovers Act 1991, Financial Sector (Shareholding) Act 1998 and an Australian financial services licence (AFS licence - see Step 2).
Foreign insurers are required to appoint an agent in Australia.
The timetable for the registration process depends on the complexity and completeness of the material provided by the applicant and the applicant's ability to meet APRA's requirements from day one. Generally, the overall registration process takes from three to twelve months.
The Schedule of Fees for general insurance is published on APRA's website. There is an application fee as well as ongoing fees.
APRA's authorisation process is consultative and each applicant is assigned a supervisor who is their main contact for all APRA-related matters. APRA encourages applicants to meet with APRA earlier in the process and you may contact APRA through the website.
The application process involves the following steps:
Read the prudential standards, prudential rules and prudential practice guides to understand the requirements before preparing your application.
Approval of the application may be contingent on other relevant approvals being granted under the Insurance Acquisitions and Takeovers Act 1991, Financial Sector (Shareholding) Act 1998 and an Australian financial services licence (AFS licence - see Step 2).
The timetable for the registration process depends on the complexity and completeness of the material provided by the applicant and the applicant's ability to meet APRA's requirements from day one. Generally, the overall registration process takes from three to twelve months.
The Schedule of Fees for life insurance is published on APRA's website There is an application fee as well as ongoing fees.
