ASIC Limited Licence Checks

Following the cessation of the accountants’ exemption, self-managed superannuation funds (“SMSFs”) became a financial product under the licensing provisions of the Corporations Act 2001 (Cth) (“the Act”). From 30 June 2016, those accountants wishing to provide advisory and dealing services in regard to SMSFs needed to either obtain an Australian Financial Services (“AFS”) Licence, or be appointed as an Authorised Representative of another licensee.

ASIC has advised that over the past year, it conducted a series of checks on twenty (20) limited licensees to assess how each was operating under the new legislative and regulatory framework. ASIC also sought to discuss and promote a culture of compliance in regard to the licensee’s obligations.

Each licensee was questioned about their business model as well as how the new regulatory regime was operating in practice. ASIC noted that many licensees were still establishing their business and coming to grips with their new obligations. Many of the licensees reviewed indicated that the provision of financial advice was not a big part of their business - in fact only half of the respondents indicated that they had provided any financial product advice.

ASIC noted three (3) areas of concern as a result of the visits:

Ongoing Compliance Obligations

There was uncertainty in regard to the resources required to monitor their compliance and what steps they needed to take to ensure ongoing compliance with the general obligations, pursuant to Section 912A of the Act.

Financial Adviser Register

There was confusion in regard to ASIC’s Financial Adviser Register (“FAR”) - that is, many did not know what information was required to be uploaded onto the FAR. ASIC also noted that nearly half the licensees had not updated the FAR with the applicable adviser information.

Disclosure Documentation

Licensees were not fully conversant with the documentation that they are required to provide retail clients. This included the types of documents (for example, Financial Services Guide, Statement of Advice), the content of the documents and when the documents needed to be provided.

The review has shown that there is still a lot of work that needs to be done to ensure limited licensees are fully aware of their obligations - this was despite many licensees indicating that they were actively seeking training and assistance in a number of areas. ASIC has therefore resolved to provide additional education resources for limited licensees, particularly focusing on their ongoing compliance obligations and client engagement.

ASIC has also indicated that they will shortly contact those licensees with no advisers recorded on the FAR to remind them of their obligations in this regard.

ASIC Information Sheet 216, AFS licensing requirements for accountants who provide SMSF services, can be found by clicking here.


Please note that in conjunction with Financial Education Professionals, Ariel & Associates is conducting a free compliance seminar for limited licensees. Please contact me for further details or for registrations.

When: Tuesday 25 July 2017 (lunch time)

Where: 1 Bligh Street, Sydney


Should you have any queries about ASIC or other issues involving compliance, licensing, or corporate governance, please contact Jeremy Danon, director of Ariel & Associates Pty Ltd on (02) 8223 3355 or at