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
About financial services
Financial services providers to whom this Gateway may apply include financial advisors, stock brokers, prime brokers, derivatives and foreign exchange dealers, capital markets dealers, investment managers, asset consultants, custodians, margin lenders, non-bank mortgage brokers, finance companies, money market corporations, and consumer credit providers.
Under the Corporations Act 2001, you must hold an Australian financial services licence (AFS licence) if you provide financial services in Australia or to Australian clients from overseas. In limited circumstances, an exemption may apply - See 'Exemptions' tab in Step 2. The Australian Securities and Investments Commission (ASIC) is the regulator of AFS licences.
The AFS licence will need to contain a specific authorisation covering the financial services and products you intend to offer.
Financial services include:
A 'financial product' is a facility that allows (other than incidentally), a person to make a financial investment, manage a financial risk or make non-cash payments. These include shares, debentures, interests in a managed investment scheme (collective investment scheme), derivatives, general insurance, life insurance, superannuation, basic deposit products, retirement savings accounts, and margin lending facilities.
