Andrew Ham

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Viewing 15 posts - 1 through 15 (of 16 total)
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  • Andrew Ham
    Member

    Hello Clinton,

     

    Thank you for your question.

     

    As you mentioned, ASIC maintains a register of Australian Financial Services licensees showing their authorised representatives.  However there is no simple way to identify licensed businesses with the authorisations you require.  You may or may not find that licensees on the ASIC register are willing to appoint authorised representatives.

     

    The best course may be to seek potential leads from industry bodies, but you will otherwise need to rely on your own network.

     

    Becoming an authorised representative is a big decision and there are several things you need to consider.  We would recommend that you familiarise yourself with the issues we set out in Holley Nethercote’s paper, “Authorised Representative Agreements – The Essential Terms”.  You should also consider obtaining your own legal advice to confirm the authorisations you require.  This will ensure that the AFS licensee you identify as a potential partner not only has the necessary authorisations, but is a good cultural fit for, and can effectively support, your business.  You should also bear in mind that there are some financial services that only a licensee can provide.

     

    As licensees are responsible for the compliance of their CARs you may find that they will require you to fit in with their model when it comes to the support they provide.

     

    Please feel free to contact our Financial Services Team for further information.

     

    Author: Andrew Ham (Senior Lawyer)

    Co-contributor: Greta Walters (Law Clerk)

     


    Andrew Ham
    Member

    Hello,

     

    Thank you for your question.

     

    We cannot give you specific legal advice without more information about your circumstances.  However you are correct, as a general principle, in saying that if you are covered by an AFS licence, any financial product advice provided (whether by the AFS licensee or its representatives) in regards to the establishment, operation, structuring and valuation of the fund, will need to be covered by authorisations on the licence.

     

    As a Corporate Authorised Representative, your company and its duly sub-authorised directors and employees will be deemed to be representatives of the licensee, with authority to advise and deal in the financial products and services as set out in the licence, subject to any limitations imposed by the licensee.  You therefore need to ensure that your licence has all the authorisations you require to operate your business.

     

    Please feel free to contact our Financial Services Team if you would like to obtain more specific legal advice on your particular situation.

     

    Authors: Andrew Ham (Senior Lawyer) and Greta Walters (Legal Clerk)

     

     

    in reply to: How to become an authorised representative #4984

    Andrew Ham
    Member

    Hi Ryan,

     

    Thank you for your post.

     

    You haven’t mentioned the kind of business you are in or the authorisations you require. However, ASIC maintain registers of both Australian Financial Service licensees, showing their authorised representatives, and of authorised representatives showing their licensees.  Unfortunately, there is no simple way to identify licensed businesses with the particular authorisations you require.  Licensees on the ASIC register also may not be willing to appoint authorised representatives.

     

    Depending on your industry, an option may be to seek assistance from industry bodies about potential licensees to approach.  Your own network or the members on this forum may also have suggestions.

     

    We note that becoming an authorised representative of an existing AFS licensee is an important decision.  You will need to be clear about the authorisations you require and identify a licensee that both holds these authorisations and is a good cultural fit with you and your business.  This is significant as the licensee will require close oversight of your business as it is responsible for your compliance and liable for any problems.

     

    Please feel free to contact our Financial Services Team for further information.

     

    Author: Andrew Ham (Senior Lawyer)

    Co-contributor: Nicolette Tan (Law Clerk)


    Andrew Ham
    Member

    Hello Richard,

    Thanks for your question.

    As an authorised representative, you have been appointed by an AFSL holder to provide certain financial services on its behalf. You must therefore include your business’s name and AFSL number on documents issued under its authority such as SOAs and your FSG. You should also include your authorised representative number.

    Taking your example of “Fake Business Name” as an authorised representative of a licensee that is Fake Pty Ltd the relationship would be disclosed as follows: –

    • Fake Business Name, Authorised Representative (No. 1234) of Fake Pty Ltd, AFSL No. 5678.

    Don’t forget companies also have an obligation to include their ABN or ACN on most documents they issue.

    We suggest you review ASIC’s Regulatory Guide 90, which sets out an example Statement of Advice, including the required details of the authorised representative (providing entity) and the authorising licensee.

    It is also important to consider any obligations you may have under a CAR or AR agreement. These may include an obligation to display or disclose information on written material provided to clients, such as the licensees name, number and business address, along with the CAR or AR’s details.

    Please feel free to contact our Financial Services Team for further assistance.

    Authors: Andrew Ham (Senior Lawyer) and Greta Walters (Legal Clerk)

     


    Andrew Ham
    Member

    Hello,

    Thank you for your question.

    It is important to be clear about the separate roles of the Register of Authorised Representatives and the Register of Financial Advisers.

    If the staff member of the CAR is sub-authorised under the CAR Agreement to provide financial product advice on behalf of the licensee, then that person is also an authorised representative of the licensee.  In this case, there are two registers these individual financial advisers that are individuals must be registered on; the Financial Adviser Register, and if they are appointed under the CAR Agreement, as sub-authorised representatives also on the separate Authorised Representative Register.

    The CAR, or the licensee on its behalf, must notify ASIC when it authorises any financial adviser to give financial product advice, within 15 business days of the appointment.  These “sub-authorised” advisers are authorised representatives for the purpose of the Act just as the CAR is.  This can be completed through ASIC Connect by providing adviser details to be uploaded onto the Financial Adviser Register.

    Financial adviser’s details must also be kept up-to-date, as failing to do so will be a breach of the licensee’s obligations.

    The adviser appointed as a sub-authorised representative might, nevertheless, issue SOAs in the name of the CAR.  This does not affect their registration obligations.  There are, however, circumstances where notification is not required.  Under s916F of the Corporations Act 2001, there is no obligation to notify ASIC of the appointment of financial advisers if the following conditions are met:

    • They are employees of the authorised representative and included in a specified class of individuals that the licensee has consented to authorise under s916B(5);
    • The financial services they are authorised to provide are limited to:

    — general advice on and/or dealing in general insurance products, cash management trust interests or basic deposit products and related non-cash payment facilities (see reg 7.6.04A of the Corporations Regulations 2001); and/or

    — personal advice on basic deposit products and related non-cash payment facilities; and

    • The authorised representative provides information about them and their authorisation when requested.

    Please feel free to contact our Financial Services Team for further information.

    Authors: Andrew Ham (Senior Lawyer) and Greta Walters (Legal Clerk)

     

    in reply to: Bankruptcy #4944

    Andrew Ham
    Member

    Hello Ted,

    Thank you for your question.

    An individual is not, by virtue of being a declared bankrupt, prohibited from providing financial services as a representative of an AFS Licensee under the financial services legislation or standard AFSL conditions.

    However, the reasons and consequences of the bankruptcy may be relevant.  It is no coincidence that HB 322 – 2007 Reference Checking in the Financial Services Industry, which is endorsed by ASIC, recommends conducting bankruptcy searches on prospective applicants.

    As an AFS Licensee, you have an obligation to “do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly”.

    Accordingly, whether they can continue as a representative is a decision for the AFSL holder, based on the circumstances of the bankruptcy.  You should enquire about the reason(s) for the bankruptcy, so that you are able to assess the extent it may impact their (and consequently, your) ability to provide financial services efficiently, honestly and fairly.  One way of looking at this assessment might be to consider the question of ‘fault’ and who (if anyone) suffered losses as a result, as well as the impact on the representative going forward.

    You are also required to ensure that the representative is competent to provide the financial services.  You may decide that special or additional monitoring and supervision procedures should be in place to ensure this requirement is satisfied.

    We recommend that in extraordinary cases such as this, that you document your enquiries, including the steps (or lack of steps) you will take and your reasons for your approach, to demonstrate you have turned your mind to these matters.  There may be other factors that are unique to you.  For example, you should consider whether any conditions on your AFSL are applicable.  You should also consider whether any of the terms in the employment agreement or authorised representative agreement between you and your representative are effected by bankruptcy.

    (We have previously answered this question on the AFSL Forum in 2011.  As you can see, not much has changed in the past 5 years!)

    Please feel free to contact our Financial Services Team if you require any further assistance.

    Author: Andrew Ham (Senior Lawyer) and Greta Walters (Legal Clerk)

     

    in reply to: Finding an AFSL holder to become an Authorised Rep of #4908

    Andrew Ham
    Member

    Hi Steven,

    Thanks for your question.

    ASIC maintains registers of both AFSL holders showing their authorised representatives, and of authorised representatives showing their licensees.  However, there is no easy way to find a licensee with the particular authorisations you require.  You may or may not find that licensees listed on the ASIC register are willing to appoint authorised representatives.  Depending on the industry you are in, the best course may be to seek potential leads from industry bodies, but you will otherwise need to rely on your own network.

    Becoming an authorised representative is a big decision and there are several things you need to consider. We would recommend that you familiarise yourself with the procedures and obligations located here.  This will ensure that the AFS licensee you identify as a potential partner not only has the necessary authorisations, but is a good cultural fit for your business.  You should also bear in mind that there are some financial services that only a licensee can provide.

    Please feel free to contact our Financial Services Team for further information.

    Author: Andrew Ham (Senior Lawyer)

    Co-contributor: Nicola Stevenson and Greta Walters (Law Clerks)

     

    in reply to: how identify regulatory changes that affect the aml/ctf program? #4893

    Andrew Ham
    Member

    Hi Linda,

    We have responded to your last two questions in turn:

    1. Details of our products and services are available on our website.   We regularly update our website to address any changes relating to these products and services.
    2. Designated service providers have an obligation to include procedures in their AML/CTF programs to identify their AML/CTF risks, the significance of those risks and the effectiveness of the controls in place to manage them.

    Please feel free to contact us to see if we can provide you with assistance in assessing the controls in your program.

     

    Author: Andrew Ham

    in reply to: Annual compliance certificate fee #4868

    Andrew Ham
    Member

    Dear Genevieve,

     

    Thank you for your question.

     

    Under the National Credit Code (“the Code”), a “consumer lease” is a contract for the hire of goods, by a natural person or strata corporation, with no right or obligation to purchase the goods.

     

    Loan contracts are credit and are therefore counted as a different component of the annual compliance certificate fee; Item 1, “the total amount of credit advanced by you in the preceding financial year”.

     

    To determine whether your business offers leases or credit, you must consider the terms of your customer contract.  More specifically, consider whether there is a right or obligation to purchase on the part of the customer.  If the answer is yes, it is a credit contract and will come under Item 1.  If the answer is no, it is a lease agreement and will come under Item 5.

     

    However please be advised that the Code applies to fixed term leases only.  Indefinite term leases are exempt from regulation under the Code.

     

    Please feel free to contact our licensing team if you require further information.

     

    Authors: Greta Walters (Legal Clerk) and Andrew Ham (Senior Lawyer)

     

    Our new Sydney office on Martin Place was recently launched on 1st July 2016!!  We are very excited about this opportunity to service our Sydney clients.  

     

     

     

    in reply to: Can you have one FSG for multiple AFSLs? #4812

    Andrew Ham
    Member

    Hi Alastair,

    Thanks for your question.
    There is no legislative provision that prevents multiple licensees from combining to use one Financial Services Guide (FSG).  However, financial services disclosure is required to be clear, concise and effective, which may be difficult to achieve under this approach.  We would normally suggest each licensee maintain its own FSG, but see here for an example of one FSG which covers several licensees.
    ASIC Regulatory Guide 168 (Disclosure: Product Disclosure Statements (and other disclosure obligations)) sets out ASIC’s view of the principles of good disclosure.  These include that disclosure should (among other things):

    • be relevant and complete;
    • highlight important information; and
    •  have regard to consumer needs.

    Each FSG must also be kept up-to-date at the time it is given.

    Presumably, this will be more difficult if the required disclosures for multiple licences are combined in the one FSG.  As the structure of each FSG will depend on the nature of each business and the product being offered, we normally suggest that separate FSGs are maintained, or alternatively, seek further legal advice.
    Please feel free to contact our Financial Services Team if you require further information.

     

    Authors: Greta Walters (Legal Clerk) and Andrew Ham (Senior Lawyer)

    Our new Sydney office on Martin Place was recently launched on 1st July 2016!!  We are very excited about this opportunity to service our Sydney clients.

    in reply to: Asset Based Fees and Mortgage re-draw #4811

    Andrew Ham
    Member

    Hello,

     

    Thank you for your question.  As you have noted, s 964D of the Corporations Act 2001 (Cth) (‘The Act’) states that ‘a financial services licensee must not charge an asset based fee on a borrowed amount used or to be used to acquire financial products by or on behalf of the client.’  Section 964G of the Act defines ‘borrowed’ to mean ‘borrowed in any form, whether secured or unsecured, including through: (a) a credit facility… and (b) a margin lending facility.’

     

    The explanatory memorandum relating to s 964D stipulates that the ban is designed to avoid conflicts of interest that arise from remuneration based on the amount of funds under management.

     

    We recommend that you check your client’s loan product agreement and carefully consider the terms of the mortgage redraw facility.  Because the redrawn amount is accessed ‘through a credit facility,’ we would generally expect redrawn funds to qualify as ‘borrowed’ under the above definition.  However, the precise answer to your question may depend on the terms of the loan product.

     

    Please feel free to contact our Financial Services Team if you require further information or more detailed advice.

     

    Authors: Tamara Cherny (Law Clerk) and Andrew Ham (Senior Lawyer)

    Our new Sydney office on Martin Place was recently launched on 1st July 2016!!  We are very excited about this opportunity to service our Sydney clients.


    Andrew Ham
    Member

    Hi Linda,

    Thank you your question.  It is understandably difficult to keep up with all the regulatory changes that will affect your AML/CTF program.  In addition to changes in the law, and the rules, AUSTRAC regularly releases guidance and legal interpretations that can affect your program.  You also need to remember to keep your risk assessments up to date.

    We offer a tailored monthly regulatory update service that you can use to keep up to date with the law, the rules and feedback from AUSTRAC.  This is an interactive service that tells you when there is a change and where relevant will include a compliance tip that you need to consider updating your program.

     

    Please feel free to contact our Financial Services Team if you require any further information or more detailed advice.

     

    Author:  Andrew Ham (Senior Lawyer)

    Co-contributor: Joanne Lee (Law Clerk)

    Our new Sydney office on Martin Place just launched today!! We are very excited about this opportunity to service our Sydney clients.

    in reply to: Taking over 10% of your super #4788

    Andrew Ham
    Member

    Hello,

    Unfortunately we are unable to provide you with advice about your client’s superannuation arrangements as it is essentially a matter that is not within our client focus.

    A professional taxation adviser (such as an accountant) is best placed to advise him on the complex rules surrounding this issue, based on a detailed understanding of your client’s circumstances.

    We presume that the platform provider, in enabling your client to act in this manner, has taken its own advice and is satisfied that it is a legitimate strategy.   You might consider contacting the platform provider and discussing it with them directly.

    Author: Andrew Ham

    Co-contributor: Greta Walters

    Keep an eye out for the launch of our new Sydney office on Martin Place in July 2016!!  We are very excited about this opportunity to service our Sydney clients.

     


    Andrew Ham
    Member

    Hi Jack,

    Thanks for your question.

    An individual is not, by virtue of being a declared bankrupt, necessarily prohibited from providing financial services as a representative (i.e. either as employee or authorised representative) of an AFS licensee under the financial services legislation or standard ASFL conditions.

    However, the reasons for, and consequences of, your bankruptcy may be relevant to your AFS licensee and their obligations. It can make a difference how much to “blame” you are and how much creditors are out of pocket.

    Your licensee has an obligation to “do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honesty and fairly”, including the financial services you provide.  The licensee is also obliged to ensure you are competent to provide the financial services.  You should check your Authorised Representative Agreement carefully.  You are likely to be required to inform the licensee promptly and you may be required to provide information regarding the reason(s) for the bankruptcy.  Your licensee may impose special or additional monitoring and supervision procedures to ensure these requirements are satisfied, assuming it is willing to continue the relationship.

    You should also consider any relevant conditions on the AFSL, along with any terms in the employment agreement or authorised representative agreement between you and your licensee, which may be effected by bankruptcy.

    If you require further information, please contact our Financial Services team.

     

    Author: Andrew Ham

    Co-contributors: Greta Walters and Nicola Stevenson.

    Keep an eye out for the launch of our new Sydney office on Martin Place in July 2016!!  We are very excited about this opportunity to service our Sydney clients.


    Andrew Ham
    Member

    Hi Divya,

    Thanks for your question.

    Before you can assess software solutions you need to determine whether your business is offering a designated service under the AML/CTF laws.  These are outlined in section 6 of the AML/CTF Act.  Further guidance can be found on the AUSTRAC website.

    We are not familiar with the Oracle product, however it is worth noting that while IT platforms can facilitate customer due-diligence and compliance with AML/CTF requirements,  technology can only provide some of the solution in meeting your AML/CTF obligations, (if any).  It is never the complete answer.  We recommend you visit the AUSTRAC website to get a clearer picture.

    Please feel free to contact our Financial Services Team if you require further information or more detailed advice.

    Author: Andrew Ham

    Co-contributor: Greta Walters

     

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