Date posted: 13/01/2022

Important considerations for cancelling an AFSL

Increasing costs of running an AFSL through regulatory complexity, coupled with the need to pass the FASEA exam by 31 December 2021, will see members cancelling their AFSL.

In brief

  • Many members are considering cancelling their AFSL, or will be required to do so, as they haven’t successfully completed the FASEA exam
  • Important guidance on ASIC considerations in cancelling an AFSL has been prepared
  • It would be prudent to seek the services of a compliance expert

The current regulatory requirements of running an AFSL are both onerous and costly.  In addition, current advisers of the Financial Adviser Register (FAR) who have not successfully completed the FASEA exam prior to 31 December 2021 will be forced to leave the FAR which for many, will also see the need to cancel an AFSL.

The only exclusion to this forced removal is if an adviser has unsuccessfully attempted the FASEA exam twice prior to 31 December 2021 as they will be given a further opportunity in 2022, with details yet to be announced.

CA ANZ has continually advocated for a strategic advice model for members who should not need an AFSL to provide basic superannuation advice in the ordinary course of being a CA. This advocacy has recently been elevated to a further senior Federal Government Minister and we keenly await a decision. 

To follow are some handy guidelines for members who decide to cancel their AFSL or for those who are forced to do so.

Cancelling your licence

You must maintain professional indemnity (PI) insurance and membership of an ASIC-approved external dispute resolution (EDR) scheme until you receive notification the licence has been cancelled.

Before you request a cancellation, you should first:

  1. revoke any authorisations you have given to representatives and notify ASIC of the revocations within 10 business days through ASIC Connect.
  2. notify all representatives of the revocation.
  3. confirm the status of any disputes with EDR schemes. 
  4. lodge Form FS70 Australian financial services licensee profit and loss statement and balance sheet and/or Form FS71 Auditor’s report for AFS licensee for any financial year that ends before the date the licence is cancelled. 
  5. take steps to discharge any amounts owed to ASIC.

What needs to be included in a ‘request for cancellation’?

To cancel an AFSL, members must first complete ASIC’s request for cancellation and include a covering letter detailing the reasons for cancelling your licence. You must include all contact details (postal address, email address, telephone number).

‘CA ANZ has continually advocated for a strategic advice model for members who should not need an AFSL to provide basic superannuation advice in the ordinary course of being a CA.  This advocacy has recently been elevated to a further senior Federal Government Minister and we keenly await a decision. For those who can stay on the FAR, we suggest you do so.’

The current regulatory requirements of running an AFSL are both onerous and costly.  In addition, current advisers of the Financial Adviser Register (FAR) who have not successfully completed the FASEA exam prior to 31 December 2021 will be forced to leave the FAR which for many, will also see the need to cancel an AFSL.

The only exclusion to this forced removal is if an adviser has unsuccessfully attempted the FASEA exam twice prior to 31 December 2021 as they will be given a further opportunity in 2022, with details yet to be announced.

CA ANZ has continually advocated for a strategic advice model for members who should not need an AFSL to provide basic superannuation advice in the ordinary course of being a CA.  This advocacy has recently been elevated to a further senior Federal Government Minister and we keenly await a decision. 

To follow are some handy guidelines for members who decide to cancel their AFSL or for those who are forced to do so.

‘CA ANZ has continually advocated for a strategic advice model for members who should not need an AFSL to provide basic superannuation advice in the ordinary course of being a CA.  This advocacy has recently been elevated to a further senior Federal Government Minister and we keenly await a decision. For those who can stay on the FAR, we suggest you do so.’ 
Bronny Speed – Financial Advice Leader

The covering letter should clearly set out:

  • your licence number
  • that you want ASIC to cancel your AFS licence
  • that you have ceased or will cease to carry out any financial services business that requires an AFS licence
  • the date you cease or will cease to carry out the financial services business
  • your reason(s) for ceasing your financial services business
  • whether you will continue to operate your financial services business under an exemption from the requirement to hold an AFS licence
  • whether you are under administration 
  • whether you are APRA regulated 
  • any related corporate bodies that are APRA regulated and whether any activities they undertake will be prevented by the licence cancellation
  • details of any outstanding financial statements (Form FS70) and auditor’s reports (Form FS71), and the reasons these are outstanding
  • if ASIC holds a security bond, the details of the bond. You will also need to lodge a Form FS20 Change of details for an Australian financial services licence and provide lodgement details in your covering letter
  • your EDR scheme name and membership number
  • details of any dispute(s), both internal and with an EDR scheme that have not been fully resolved
  • whether you will accept notice of cancellation by email and, if so, a valid email address
  • a valid postal address for receipt of documents from ASIC.

Where do you send your cancellation request?

Email the request and the covering letter to [email protected], at which time a fee invoice for $899 will be issued. This will need to be paid before the cancellation will be processed. 

What happens with the cancellation request?

ASIC assesses your request to ensure that there are no outstanding matters that preclude cancellation of your licence. ASIC will not generally process the cancellation until all outstanding lodgements are up to date, so make sure there are no outstanding financial statements and/or auditor’s reports (where appropriate).

How do you know when your cancellation request is approved?

ASIC will send you a letter when they have cancelled your licence and will also publish a notice of the cancellation in the ASIC Gazette.

Read about our licensing advocacy

The CA ANZ financial advice advocacy team in Australia is currently working on a review of limited licensing to develop an effective and permanent model for the provision of limited financial advice by accountants.

Find out more

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