Part 7.6 of the Corporations Act 2001 (Cth) (Corporations Act) establishes a licensing regime for providers of financial services. The meaning of when a person provides a “financial service” is explained in Div 4 of Pt 7.1

See Financial service.

A person who provides financial services in Australia must:

• unless an exemption applies, hold a licence to do so;

• comply with a number of obligations in providing the services; and

• make certain disclosures regarding financial products.

There are a number of ASIC Regulatory Guides which are relevant to licensing of providers of financial services and these should be read in conjunction with the relevant provisions of Pt 7.6 .

Division 2 of Pt 7.6 deals with the requirement to be licensed or authorised.

Section 911A(1) states that, subject to that section, a person who carries on a financial services business in this jurisdiction must hold an Australian financial services licence covering the provision of the financial services.

An Australian financial services licence is a licence granted by ASIC under s 913B that authorises a person who carries on a financial services business to provide financial services.

Note that ASIC can grant a “limited” Australian financial services licence which allows the licensee to provide “limited financial services”.

Under s 911A(2) and the Corporations Regulations 2001 (Cth), there are a number of exemptions from the requirement to hold an Australian financial services licence. One exemption is where a person provides the service as a representative (including an authorised representative) of a holder of an Australian financial services licence.

ASIC has also exempted persons and classes of persons from the requirement to hold a licence and has issued legislative instruments/class orders and regulatory guides in relation to licensing relief.

See Requirement to be licensed unless exempted.

A financial services licensee must comply with a number of obligations imposed on them under Div 3 of Pt 7.6. The main obligations are imposed by ss 912A and 912B .

It should be noted that s 912A imposes general obligations on licensees and that, not only must licensees comply with those general obligations, but licence applicants must be able to demonstrate in their licence application that they can comply with the general obligations. Therefore, ASIC has issued a number of regulatory guides providing guidance on the general obligations of financial services licensees.

See Obligations of financial services licensees.

Division 4 of Pt 7.6 deals with:

• the requirement to lodge an application with ASIC if an Australian financial services licence is to be obtained and the preconditions to ASIC granting such a licence;

• the conditions on the licence which may be:

• when a licence can be varied, suspended or cancelled.

See Australian financial services licences.

ASIC has an eLicensing system which enables the application for an Australian financial services licence to be completed online through the ASIC website. If an applicant cannot or does not wish to apply online, there is a paper preliminary application form.

To assist in preparing an application and the supporting documents for an application, ASIC has issued the AFS Licensing Kit which:

• explains the process of applying for (and varying) a licence;

• provides a step-by-step guide to preparing the application for a licence (and for a variation of a licence); and

• provides a guide for preparing the supporting documents for the application.

In addition, ASIC has issued Information Sheet 179 Applying for a limited AFS licence for applicants applying for a “limited” AFS licence.

A licensee is obliged under the Corporations Act to notify ASIC of certain things. After a licence is issued, there is a Licensees portal on the ASIC website which can be used for this purpose.

See The application process for a financial services licence.

The conduct of representatives of financial services licensees is regulated by Pt 7.6 . Section 911B(1) sets out the circumstances in which a person may provide a financial service on behalf of a licensee. By s 911C , there is a prohibition on holding out that the person is acting on behalf of another person when providing financial services or that conduct is within authority if that is not the case.

Division 5 of Pt 7.6 deals with the appointment of authorised representatives and Div 6 of Pt 7.6 deals with the liability of financial services licensees for their representatives.

See Representatives, authorised representatives and liability of licensees for representatives.

Division 8 of Pt 7.6 deals with banning or disqualification of persons from providing financial services.

ASIC may:

• make banning orders in certain circumstances against a person (s 920A ); or

• apply to the Court for a disqualifying order in relation to a person in certain circumstances: s 921A .

A person against whom a banning order or disqualification order is made cannot be granted an Australian financial services licence contrary to the banning order or disqualification order: ss 920C and 921A(4) .

ASIC maintains registers of persons subject to banning orders or disqualification orders: ss 922A and 922B and reg 7.6.06 .

See Banning or disqualification of persons from providing financial services.

Divisions 9 to 12 of Pt 7.6 address the following matters:

• registers which ASIC must establish and maintain relating to financial services (Div 9 );

• restrictions on use of terminology (Div 10 );

• agreements between clients and unlicensed persons relating to the provision of financial services when the unlicensed person was not exempt from the requirement to hold a licence (Div 11 ); and

• exemptions and modifications by ASIC and the regulations: Div 12 .

See Registers, restrictions on use of terminology and other matters.