The Australian Securities and Investments Commission (ASIC) is a highly reputable regulatory body that oversees financial services in Australia. Since 2017, ASIC has stopped issuing full licenses, making Authorised Representative (AR) licenses a popular alternative for companies and individuals looking to undertake regulated activities. An AR refers to a company or individual appointed by an ASIC-regulated company to act on their behalf without being directly regulated by ASIC. There are several benefits to becoming an AR, including lower costs, quicker approval times, and reduced compliance burden. This article will provide an introduction to AR licenses, including an overview of ASIC, the responsibilities involved, and the application process.
What is an ASIC AR license
An ASIC AR license allows an individual or company to provide certain financial services while being authorized and supervised by an ASIC-regulated company known as the Principal. The Principal takes on compliance obligations and reports the AR details to ASIC. Key aspects include:
– Lower license cost and faster approval time compared to a full ASIC license
– Principal oversees AR compliance and is responsible to ASIC for AR activities
– Written agreement stipulating responsibilities required between Principal and AR
– Principal must vet AR for capability and resources first
– Principal accountable for products sold and advice given by AR
So in summary, an AR license enables regulated financial activities while leveraging the license and supervision of a fully ASIC-regulated Principal company.
Overview of ASIC authority and responsibilities
As Australia’s securities and investments regulator, ASIC oversees the following institutions and activities:
– Banks, insurers, super funds, financial advisors
– All financial services and products – securities, derivatives, credit, investments
– Market integrity and consumer protection
– Mandates licensing, audits, reporting, dispute resolution etc.
ASIC pushes for transparency and accountability in banking and investments to serve the public interest. It provides regulatory supervision while aiming to encourage financial innovation and growth.
A full ASIC licence has become difficult to obtain since 2017. This led to a rise in AR licenses that leverage ASIC’s regulatory remit in a more accessible way while meetingcompliance standards.
AR license application process and requirements
The typical application steps and requirements for an ASIC AR license are:
1. Incorporate an Australian company
2. Prepare license application docs
3. Get authorization from Principal provider
4. Submit completed forms to ASIC
The required documents include:
– Company details like tax ID
– Director and shareholder personal information
– Office address
– Criminal record checks
– Application forms signed by Principal
So in summary, by leveraging a Principal’s existing ASIC licence, the AR application process is straightforward relative to applying directly for a full ASIC licence.
ASIC AR licenses allow individuals and companies to undertake regulated financial activities through oversight arrangements from Principal providers. This route is accessible, affordable, quicker than applying directly for a full licence. As interest grows in areas like digital assets, more firms are likely to operate under AR licenses with supervision from experienced Principals.