Comply with AFSL general obligations (s 912A)
AFSL holders must do all things necessary to ensure financial services are provided efficiently, honestly and fairly.
Who must comply
All AFSL holders.
What triggers it
Holding an AFSL.
When due
Continuous.
Evidence required
Compliance plan, RG 104 register, breach reports, training records, AFCA membership.
Max penalty
Civil penalties up to $16.5M / 3× benefit / 10% turnover (corporations)
Summary
Section 912A of the Corporations Act imposes ten general obligations on AFS licensees including: efficient/honest/fair provision of services; managing conflicts; complying with conditions; adequate resources; competence; training; risk management; dispute resolution; and (since 2021) the design and distribution obligations under Part 7.8A.
Enforced by
Source legislation
Entity types
Topics
Related obligations
- CWLTHMaintain adequate PI insurance (AFSL holders, RG 126)AFSL holders providing financial services to retail clients must hold adequate professional indemnity insurance.
- CWLTHAuthorise representatives correctly (Authorised Representative regime)AFSL holders must authorise representatives in writing and notify ASIC of new ARs within 15 business days.
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- CWLTHComply with Design and Distribution Obligations (DDO)Issuers and distributors of retail financial products must have a Target Market Determination (TMD) and distribute consistently with it.
- CWLTHBan on conflicted remuneration (FOFA)AFSL holders and representatives must not accept conflicted remuneration in connection with retail financial product advice.
- CWLTHMaintain AFCA membership (mandatory external dispute resolution)AFSL + ACL holders must be members of AFCA — sole AU EDR scheme.
Frequently asked questions
- Who must comply with AFSL general obligations (s 912A)?
- All AFSL holders.
- What triggers AFSL general obligations (s 912A)?
- Holding an AFSL.
- When is AFSL general obligations (s 912A) due?
- Continuous.
- What is the maximum penalty for AFSL general obligations (s 912A)?
- Civil penalties up to $16.5M / 3× benefit / 10% turnover (corporations)
- What evidence is required for AFSL general obligations (s 912A)?
- Compliance plan, RG 104 register, breach reports, training records, AFCA membership.
Source: https://asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.