in compliance: | in risk management: | in training: think Satus.
See our detailed information about applying for an AFS licence here.
All AFS licenses must be supported by detailed compliance policies and procedures which are designed to ensure compliance of the licence with the AFS licence conditions and the Corporations Act 2001. Section 912A of the Corporations Act provides that a financial services licensee must comply with the conditions of its AFS licence, the financial services laws and must take reasonable steps to ensure that its representatives comply with the financial services laws.
The compliance policies and procedures must be designed in consideration of the size, scale and complexity of the AFS licensee's financial services business. The compliance arrangements must be designed to protect consumer interests and make sure that the AFS licensee's financial services are provided efficiently, honestly and fairly.
The Licensee must:
- be committed to complying with all laws, regulations and codes of practice which apply to its financial services business;
- recognise its responsibility to ensure its staff are adequately trained and undertake their compliance obligations in a responsible and diligent manner;
- Develop its compliance policies and procedures in accordance with the principles outlined in Australian Standard AS 3806-2006;
- ensure that its compliance arrangements meet financial services industry standards;
- ensure that it has adequate human, financial and technical resources to implement its compliance plan and to ensure the smooth running of its business;
- have adequate risk management systems in place;
- be committed to a process of continuous improvement of its compliance plan and procedures;
- ensure the development and maintenance of a compliance of culture.
The licence conditions may allow the AFS licensee to provide advice or deal in a variety of financial products and/or underwrite an issue of securities. Licensees who deal with retail clients must ensure that they comply with the requirements established under Chapter 7 of the Corporations Act.
To achieve these requirements, it is necessary to consider:
- how good corporate governance will be achieved;
- the structure of the organisation;
- how responsibilities and functions will be segregated;
- how the outsourcing of services will be managed and overseen;
- the frequency, extent and nature of compliance monitoring and reviews; and
- the roles, seniority and capabilities of management personnel.
In addition to meeting your obligations under the Corporations Act, an AFS licensee's compliance documentation must set out your financial services business’ compliance systems, measures, policies and procedures with:
- Australian Securities and Investments Commission Act 2001;
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006;
- Privacy Act 1988;
- Competition and Consumer Act 2010;
- Australian Consumer Law as enacted in your State or Territory; and
- ASIC Regulatory Guides.
The ASIC Regulatory Guides which relate to compliance requirements for AFS licensees are:
- Regulatory guide 36 - Licensing: Financial product advice and dealing;
- Regulatory Guide 78 - Breach reporting by AFS licensees;
- Regulatory Guide 85 - Reporting requirements for non-reporting entities;
- Regulatory Guide 104 - Licensing: Meeting the general obligations;
- Regulatory Guide 105 - Licensing: Organisational competence;
- Regulatory Guide 126 - Compensation and insurance arrangements for AFS licensees;
- Regulatory Guide 146 - Training of representatives;
- Regulatory Guide 166 - Licensing: Financial requirements;
- Regulatory Guide 175 - Licensing: Financial product advisers — Conduct and disclosure;
- Regulatory Guide 181 - Licensing: Managing conflicts of interest; and
- Regulatory Guide 244 - Giving information, general advice and scaled advice.
Depending upon your specific licence conditions, additional Regulatory Guides may apply.
The Compliance Plan is a high level document which documents the AFS licensee's compliance measures. The Compliance Plan should address all of the compliance measures which relate to the AFS licensee's legal obligations and licence conditions, how these measures will be implemented and monitored, who is responsible for monitoring the compliance measures and when these compliance measures will be reviewed.
The Compliance Manual documents all of the AFS licensees policies and procedures for compliance with its legal obligations.
The Anti-money Laundering & Counter-terrorism Financing ('AML/CTF') Special Program documents the AFS licensee's measures, systems, policies and procedures with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Please see our detailed information on AML/CTF Programs here.
Updated as at 26 March 2013