ASIC, the major regulator of financial services in the Commonwealth of Australia, is responsible for ensuring conformation with all regulations in both corporate and consumer sectors. It also protects consumer rights and controls the credibility of the Australian financial system. Therefore, if one is planning to establish a financial company in Australia, they are required to apply for the approval of ASIC.
In 2018 the Australian government announcement the implication of a special committee whose task was fighting financial crimes. The committee issued a report the year after and it is still influencing the financial sector of Australia.
Are you thinking about starting a financial company in Australia, too? COREDO is here to assist and provide specialists on legal regulation of financial enterprises in Australia.
Regulations to comply with
ASIC’s main task is financial regulation therefore its principal fields of monitoring are: providers of financial services, financial companies, pension and insurance funds as well as investors. In addition, the regulator is also supervising and offering guidance on operations as deposits, loans, cashless payments and crowdsourcing.
We will now discuss the duties of ASIC:
- ASIC regulates all financial services providers and ensures that their activities are effective and honest. Therefore, it is only possible to achieve a financial license in Australia through the application submitted to ASIC.
- Since ASIC is empowered to control consumer lending, it regulates the organizations who participate in consumer crediting and gives them financial licenses. These organizations are presented as credit unions, banking institutions, financial and mortgage brokers, financial companies.
- ASIC controls whether the operators on financial markets conform to their obligations.
- When it comes to fundraising activities processed through issuing or selling financial products in Commonwealth of Australia, ASIC monitors companies like these. It also ensures that entities participating in production or sale of financial products meet the disclosure-related conditions.
APRA
APRA is an independent statutory authority, whose main task is to control banks, construction entities, insurers, reinsurers and lending institutions.
Financial license in Australia
It is necessary to obtain an AFSL license in order to be able to provide financial services in Australia. There also exist certain legal ways to be exempted from this condition and still be allowed to offer such services.
According to Australian legislation, an instrument is considered to be a financial product if it allows individuals to process investments, make cashless payments or offset financial risks. The products can be classified like this:
- Derivatives
- Securities
- Interest in MIS.
The whole range of the more detailed classification provided by Australian authorities is fairly wide. For example, the types of products vary from investment-oriented and asset management activities to security markets and crowdfunding-oriented services.
Financial services providers
To be viewed as FSPs, entities are required to appeal for a membership with AFCA. Their activities are under regulation of the act from 1988 that has thirteen principles related to privacy. These rules require AFCA members to collect, use, disclose, store and dispose with sensitive data in compliance with the bill and their obligations.
Ask COREDO
Contact our experts if you are working on gaining a financial license to open a financial company in Australia. We will assist you in the beginning period of your business by providing advice and support in the field of Australian government regulations for financial services.