ASIC allows certain AFS licensees to use lease assets to satisfy their licence financial requirements

On April 29, 2021 ASIC made changes to the financial requirements for some types of Australian financial services (AFS) licensees in relation to the treatment of leased assets. These changes will allow certain AFS licensees  to include, where the licensee is a lessee, a right-of-use asset in the calculation of their net tangible assets and, where the right-of-use asset is a current asset, adjusted surplus liquid funds and surplus liquid funds.

To implement the changes, ASIC has updated:

  • ASIC Class Order [CO 13/760] – Financial requirements for responsible entities and operators of investor directed portfolio services,
  • ASIC Class Order [CO 13/761] – Financial requirements for custodial or depository service providers,
  • ASIC Class Order [CO 12/752] – Financial requirements for retail OTC derivative issuers,
  • the standard licence conditions in ASIC Pro Forma 209 – Australian financial services licence conditions, and
  • ASIC Regulatory Guide 166 – Licensing: Financial requirements.

ASIC has also modified existing AFS licence conditions so that a right-of-use asset is deemed to not be an excluded asset.

The changes were made following industry feedback on the proposals in Consultation Paper 336 Financial requirements: Treatment of lease assets (CP 336). The feedback was generally supportive of the proposals in CP 336, and ASIC has implemented the proposals with minor adjustments only. Affected AFS licensees should review their financial requirement calculations in light of the changes. The changes have immediate effect.

Report 689 Response to submissions on CP 336 Financial requirements: Treatment of lease assets (REP 689) highlights the key issues raised in the submissions to CP 336 and details ASIC’s responses to those issues.


Under s 912A(1)(d) of the Corporations Act 2001, an AFS licensee is generally required to maintain adequate resources, including financial resources, to provide the financial services that it is authorised to provide under the terms of its AFS licence. These financial requirements are specified in each AFS licence and are based on PF 209 and various ASIC legislative instruments.

ASIC previously issued a temporary no-action position for AFS licensees in relation to potential breaches of the financial requirements that arise from recent changes to the accounting treatment of lease assets (20-158MR). The no-action position no longer applies.



© Australian Securities & Investments Commission. Reproduced with permission.