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Home Forums Australian Financial Services Licensing (AFSL) Forum Question on setting up a PAMM

This topic contains 1 reply, has 2 voices, and was last updated by  Megan Jaksa 5 years ago.

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  • #4127 Reply

    Matt Cons

    Hi,

    My first time post, I hope I provide enough information.

    The setup:

    Company A

    Owned by Australian, Singapore and USA residents.

    Goal of Company A, to create a PAMM with regulated FX broker to offer PAMM service to global client base including Australian clients

    (Company ABC Pty Ltd is authorised and regulated by the Australian Securities and Investments Commission (ASIC), licence number XXXXX.)

    Traders:

    Employee A – USA resident

    Employee B – Thailand resident

    COE; – Non trader

    Employee C

    The broker is licensed to handle the needs of the clients then part I’m unsure on is for the AFSL will that be issues to Company A or does one need to be issued for each employee or would it be enough to have employee C issued with the correct AFSL ?

    One of the other concerns is if the traders need to be replaced as often happens which is why I need to understand how the licencing part works.

    I think the last question is if the service was not offered to Australian clients would the AFSL still be needed?

    I hope I have provided enough information.

    Thanks

    Matt

    #4139 Reply

    Megan Jaksa
    Member

    Hi Matt,

    Thanks for your question.

    Whether your business will need an AFSL is not always a simple question. ASIC provides some guidance on their website.  The question is not whether you are offering services to Australian clients but whether you are operating a financial services business in Australia, which is a broader test.

    Generally, offering a PAMM service to people in Australia (or, if the company is based in Australia, to people overseas) would require an AFSL, which includes a managed discretionary account authorisation (see RG179).

    Often it is the company that holds the licence.  The employees are therefore not required to hold an AFSL, but are still required to meet certain training and supervision requirements.

    If you do need an AFSL, there are several ways that it can be structured.  To answer both questions completely for your business, you will have to obtain expert legal advice.  Please contact our financial services team if you wish to discuss further.

    Author: Paul Derham

    Co-contributor: Megan Jaksa

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