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Let's talk about the elephant in the room...

anyahaywood

Updated: Feb 10, 2023

AFSL Compliance!!


We know it's not pretty, it's not fun & doesn't get you out of bed in the morning, but it's critical for running a fund in Australia & market and regulator expectations have increased significantly in the past year.

In the past 18 months we have seen ASIC increasing its scrutiny against non-complying Australian financial services (AFS) licensees and a number of investment funds and licensee holders have found themselves under the spotlight. When a company is found to be non-compliant with ASIC's Australian Financial Services License (AFSL) regulations, they may face various consequences including:

  1. Enforceable Undertakings

  2. Prosecution and fines

  3. Suspension or cancellation of their AFS license

  4. Disqualification of directors

  5. Public warning notices

  6. Compensation orders for affected clients

  7. Corrective actions and improvements to compliance systems.

The severity of consequences will depend on the nature and extent of the non-compliance.


Of course, the ultimate goal of ASIC's enforcement action is to protect consumers and maintain market integrity. At the same time, it's a reminder that obtaining an AFS licence is actually the easy part!!


The hard part - ensuring that your business has the necessary resources, competence and lasered focus to monitor compliance, assess risks, and review systems, with regards to CAR and Authorised Representatives.


At Avenir Capital we've seen this first hand with our AFSL for hire service. In the past month we've just signed up another client who had their fund frozen on one of the major

distribution platforms due to concerns over the fund's compliance arrangements. The fund was not able to accept new investments - although redemptions were still allowed!


The platform only agreed to unfreezing the fund IF the AFSL and compliance business was moved to us here at Avenir Capital. This fund is now benefiting from our rigorous compliance procedures & welcoming back new investment.


If you're a new fund, or looking to set up a fund very soon don't worry about being slowed down by the process of obtaining an AFSL license. You can use an 'AFSL for hire', AFSL for rent' - or otherwise referred to as Authorised Representative - who can act as trustee for the funds invested. These can be in a variety of asset classes, including equities, funds managements and real estate. What this means is that your compliance headache, particularly all of the new fund related compliance tasks, will be dramatically reduced and you can focus on growing your fund and bringing in new investment.


Have any questions around AFSL licenses, Australian Financial Services License for Hire services or would like to discuss your compliance needs further?


Contact one of our team, Anya, directly on 0438 355 002, ahaywood@avenircapital.com.au or complete our short form here.





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Avenir Capital Pty Ltd (ACN 150 790 355) holds a broad-ranging wholesale Australian Financial Services Licence

(AFSL 405469), issued in & blemish-free since 2011 and provides an AFSL Authorised Representative and compliance support services

Contact us today for an obligation free consult.

Head of Business Development: Anya Haywood +61 438 355 002

ahaywood@avenircapital.com.au

©2022 by Avenir Capital. 

We acknowledge the traditional custodians of the land where we work and live, and we pay our respects to Elders past, present and emerging. We celebrate the stories, culture and traditions of Aboriginal and Torres Strait Islander communities who work and live on this land, and commit to an ongoing journey of reconciliation and respect.

General: This website contains information about us at Avenir Capital Ltd (AFSL No. 405469) and the services and products we provide.
Avenir Capital does not warrant that the functions contained in the website will be uninterrupted or error-free, that defects will be corrected or that this site or the server that makes such contents available are free of viruses or other harmful components. The information contained on this website is provided by Avenir Capital Ltd in good faith. Avenir Capital Ltd does not warrant or make any representations regarding the use or the results of the use of the contents on this site in terms of their correctness, accuracy, reliability, or otherwise. The terms "AFSL for hire" or "AFSL rental services" are colloquial terms and sometimes used in the industry to describe the services provided by an AFSL Authorised Representative.

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