The overarching duty
The central obligation is to do all things necessary to ensure the financial services covered by the licence are provided efficiently, honestly and fairly. This general standard underpins all of the more specific obligations below.
Key ongoing obligations
- Maintain organisational competence and keep responsible managers appropriate to the authorisations
- Ensure representatives are adequately trained and competent, and properly supervised
- Have adequate resources (financial, technological and human) on an ongoing basis
- Maintain risk-management systems
- Manage conflicts of interest
- Maintain a compliant dispute-resolution system, including AFCA membership
- Maintain adequate compensation arrangements (typically professional indemnity insurance)
- Comply with the reportable situations (breach reporting) regime
Breach reporting
Licensees must report certain "reportable situations" to ASIC, including significant breaches and some investigations. The regime sets timeframes for reporting once a reportable situation arises, so licensees need internal processes to identify and escalate issues quickly.
Records, audits and annual obligations
Licensees must keep adequate financial records and, in most cases, lodge audited financial statements and an auditor's report with ASIC each year. Ongoing annual levies under the industry-funding model also apply.
Failing to meet ongoing obligations can lead to ASIC action ranging from additional conditions to suspension or cancellation of the licence.
Check whether an AFSL is current, suspended or cancelled on the public register.
Check a licence statusFrequently asked questions
What is section 912A?
Section 912A of the Corporations Act 2001 sets out the general obligations of AFS licensees, including the duty to provide financial services efficiently, honestly and fairly, manage conflicts, maintain competence and resources, and have dispute-resolution and compensation arrangements.
What is the reportable situations regime?
It is the breach-reporting regime that requires AFS licensees to notify ASIC of certain situations, including significant breaches of core obligations, within set timeframes.
Can an AFSL be suspended or cancelled?
Yes. ASIC can impose conditions on, suspend, or cancel a licence where a licensee fails to meet its obligations. You can see a licence's current status on the register via AFSL Search.