Australian Financial Services Licensing (AFSL) Forum

#5156 Reply
Grant Holley
Grant Holley
Member

Hi,

 

Thank you for your question.

 

Related Body Corporate

Based on our understanding of the information given, if XYZ Pty Ltd (who holds an AFSL) is wholly owned by Corporate Trustee Pty Ltd, this would likely meet the definition of a subsidiary/holding company relationship under s 46 of the Corporations Act.  These two entities would therefore be related body corporates under the s 50 definition.

 

This means that Corporate Trustee’s employees and directors will be ‘representatives’ of XYZ under s 910A by default, so they will not be required to hold their own AFSLs of be authorised representatives in order toe provide financial product advice.

 

Financial Adviser Register

You are correct that a representative who is a ‘relevant provider’ under s 910A (which includes an authorised individual providing personal advice to retail clients) will need to be recorded on the Financial Adviser Register.  This is done through notifying ASIC as required by s 922D.  ASIC then enters the details into the Register.

 

Related Obligations

In the scenario above, the ability of the Corporate Trustee’s staff (as representatives of XYZ) to give financial product advice will be limited to what XYZ’s licence covers.  For example, if XYZ’s licence is limited to financial product advice on superannuation products, their representatives can only provide advice on that matter.

 

Internal processes may be put in place to ensure that advice is only given by individuals who are qualified to do so, and those that do give advice are aware of the limits of what they can advise on.  For example, training may be provided to ensure that all staff are aware of what constitutes ‘financial product advice’, and do not give advice inadvertently.

 

We note that under s 912A of the Corporations Act, XYZ, as the licensee, will be under the obligation to ensure that representatives comply with the law (see sub-section (ca)), and are adequately trained and competent to provide financial product advice (see sub-section (f)).  Steps taken to meet these obligations may include maintaining a register of appointed representatives, verifying their education/qualifications and providing them with ongoing training.

 

Please feel free to contact our financial services team if you require further assistance.

 

Author: Grant Holley (Partner)

Co-contributor: Nicolette Tan (Law Clerk)

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