Australian Financial Services Licensing (AFSL) Forum

Home Forums Australian Financial Services Licensing (AFSL) Forum If I agree to be a nominated Responsible Manager do I take on additional personal liability?

This topic contains 0 replies, has 1 voice, and was last updated by Grant Holley Grant Holley 4 years, 6 months ago.

Viewing 1 post (of 1 total)
  • Author
    Posts
  • #4569 Reply
    Grant Holley
    Grant Holley
    Member

    The short answer to this question is no.

     

    This response may seem at odds with the message implicit in the title Responsible Manager (RM).  Surely that means that I am the manager that is responsible for ensuring the licensee complies with its legal obligations and therefore personal liability will attach to me if I don’t.

     

    The relevant legislation does not create the role of responsible manager or set out any duties or obligations that attach to it.  It is therefore not possible for an RM to contravene a section of the legislation by not doing something an RM is required to do; simply because there is none.

     

    The legislation imposes obligations on Licensees to, among other things, have adequate human resources to carry on the financial services business, to supervise the business and to ensure that this continues to be the case.  The way the Licensee demonstrates that it has the necessary human resources, in terms of knowledge, experience and character, is to nominate people who demonstrate that competence in relation to the financial services, financial products and the regulatory regime.

     

    The RM is nominated to demonstrate the competence of the Licensee.  They are able to do this because of what they are already doing, or will be doing in the business, that will enable them to bring their competence to bear in the operation of the business.  However, it is the Licensee that carries the legal obligations, not the RM in their personal capacity.  The RM’s role is to maintain their competence and to bring it to bear in the business.

     

    Of course, a person who is nominated as an RM may be, but will not necessarily be, a director or officer of the company.  In that case, the directors and officers duties in the Corporations Act will apply to them in that capacity.  They will usually also be an employee of the company and they will have contractual obligations arising from their employment contracts.  Becoming an RM does not provide protection from legal liabilities they may have in some other capacity, but it does not add an additional layer.  Rest easy!

     

    Author:  Grant Holley

Viewing 1 post (of 1 total)

Reply

Reply To: If I agree to be a nominated Responsible Manager do I take on additional personal liability?

Your information:


<a href="" title="" rel="" target=""> <blockquote cite=""> <code> <pre> <em> <strong> <del datetime=""> <ul> <ol start=""> <li> <img src="" border="" alt="" height="" width="">

  • Free answers to common Financial Services Regulation (FSR), Consumer Credit and AML/CTF issues.

    Click here to join our LinkedIn group for responsible managers and compliance professionals.
    joinUsOnLinkedIn
  • trex

    Tailored Regulatory Exchange

    what is this and does it bite ?

    Find OutLogin

  • Legal Advice

    Review your AFSL or ACL disclosure documents, conduct a licensee audit and more…

    Get Legal Advice

  • Compliance support

    Responsible Manager Training, AFSL, and ACL applications and variations and more…

    Compliance support