Varying or Cancelling your AFSL
There are many reasons you may wish to cancel your AFSL or apply for an AFSL variation. Before you proceed with varying or cancelling your AFS Licence it is important to get the right AFSL legal advice.
In this article, we’re going to run through some reasons why you might wish to cancel or vary your Australian Financial Services Licence. You can also suspend your AFSL temporarily — for example, if your AFSL responsible manager who is a key person is away and you cannot offer that service or product until they return. We will also cover how you undertake an AFSL variation, AFS cancellation, or AFSL suspension.
CNM Legal specialises in AFSL applications and variations for a broad range of financial institutions, from start-ups to ASX-listed entities.
The following advice is general in nature and does not constitute legal advice. Please refer to the ASIC website for further details, or call us for AFSL application assistance.
Varying an AFSL
You may wish to apply for an AFSL variation for several reasons, the most common being that the nature of your business changes and you wish to offer a different financial product or service. Another frequent reason for an AFSL variation is if someone listed as a ‘key person’ as a condition on your licence leaves the business. (Another reason why losing good employees is to be avoided!)
While some minor variations such as a change of address or ABN can be made via a simple form, more complex variations such as adding new products or services will follow the same process as applying for an AFSL.
CNM Legal will guide you through an AFSL variation application from start to finish.
For AFSL Variations, our application assistance includes:
- Offering a legal opinion on the necessary authorisations
- Preparing the required documentation
- Assessing your AFSL responsible managers,
- Helping you understand the licence requirements
- Helping you dealing with requisitions from ASIC
Does it cost to apply for an AFSL variation?
Yes, as this is a variation you will incur the costs of that AFSL application.
I just want to change my business contact details, do I have to submit an AFSL application?
No, minor administrative changes to your AFSL can be made by submitting Form
FS20: Change of details for an Australian financial services licence.
You can use form FS20 to amend the details of your business:
- Address and contact details
- Business name and ABN
- Responsible Manager details (note that if the person is a key person condition
- Dispute resolution details
- Compensation details
- Bond details
- Change of controlling entity
- CPD year start date *
Does it cost to amend these details on an AFSL via FS20 Form?
Yes, as this is a variation you will incur the costs of that AFSL application.
I just want to change my business contact details, do I have to submit an AFSL application?
No, minor administrative changes to your AFSL can be made by submitting Form
FS20: Change of details for an Australian financial services licence.
You can use form FS20 to amend the details of your business:
- Address and contact details
- Business name and ABN
- Responsible Manager details (note that if the person is a key person condition
- Dispute resolution details
- Compensation details
- Bond details
- Change of controlling entity
- CPD year start date *
Does it cost to amend these details on an AFSL via FS20 Form?
No, there is no fee if you lodge the FS20 form plus any proof documents within 10 days, with the exception of changing the Continuing Professional Development (CPD) year start date*, which incurs a fee of $250. After the 10-day period, late lodgement fees apply.
Cancelling an AFSL
There are multiple reasons why you might wish to cancel your AFS licence, from not offering the financial service/s or product/s anymore to not needing an AFSL because you have an exemption, or are now working as an authorised representative of someone else who holds an AFSL.
It is vital to be crystal clear on whether you have the proper exemption before cancelling your AFSL, and our team can help you with AFSL exemption advice to ensure AFSL compliance.
Please note that you must also continue to hold professional indemnity insurance and membership in an external dispute resolution scheme until ASIC formally notifies you that your licence has been cancelled.
Cancelling an AFSL is not as simple as cancelling a driver’s licence. You can’t just hand it back no questions asked.
ASIC will require an explanation of the reason for AFSL cancellation, plus multiple checks and additional information before your licence can be cancelled.
This is to ensure that any open disputes or claims are resolved before the licence is cancelled.
Before you cancel your AFSL
- Make sure you have the correct AFSL exemption.
- Revoke any AFSL authorisations given to representatives and notify ASIC.
- De-register or transfer any registered managed investment schemes.
- Confirm the status of any disputes under the EDR scheme.
- Lodge your FS70 and/or FS71 forms.
- Discharge any amounts owed to ASIC.
How to Cancel an Australian Financial Service License?
To cancel an AFSL, you will need to complete the request for cancellation, plus a comprehensive cover letter explaining in detail the reason you wish to cancel your AFSL, plus details including but not limited to: your contact details, whether you are continuing to offer the service under an exemption, whether you are under administration, details of any outstanding financial statements or disputes, details of any security bond, and your EDR scheme name and number.
The full list of things you need to include in your cover letter can be found on this link.
Does it cost to cancel an AFSL?
Due to the administrative costs of these checks, cancelling an AFSL does incur a fee.
How to Suspend an AFSL?
There are occasions when you will need to suspend your Australian Financial Services Licence when you cannot comply with a legal requirement or condition of your licence for a particular period.
This includes when a key person responsible manager is temporarily unavailable and you cannot meet your organisational competency requirements during this time.
How to Suspend Your AFSL?
Similar to the process for cancelling your AFSL, you complete a request for suspension of your AFSL and write a covering letter explaining the reasons for the request, plus details including but not limited to the dates of suspension, any related bodies corporate, and details of any managed investment schemes or unresolved disputes.
The full list of things you need to provide can be seen here.
Does it cost to suspend an AFSL?
Yes. An invoice will be issued when your request for suspension is received. Your application will not be processed until payment has been received.
How We Can Help with Your AFSL Application and Variations
CNM Legal are expert in financial services licensing, with over 20 years of experience in AFSL applications and variations. For general information on AFSL applications and how we work to make the process as streamlined and efficient as possible, please download our AFSL Application Guide. For more details on ASIC guidelines for AFSL variations, cancellations and suspensions, please refer to the ASIC website.