The ‘fit and proper’ person test previously only applied to credit licensees – but now it applies to AFS licensees as well.
The change is bigger than it looks
Previously AFS licensees had a lower threshold test that a person be of ‘good fame and character.’ On the face of it, the change may seem trivial, but the effects are wide reaching.
ASIC now has the ability to:
Who must be a fit and proper person?
All ‘officers’ of both a licensee and the controller of the licensee, and the controller itself (if not a company), must meet the fit and proper person test.
An ‘officer’ typically includes:
This means that an applicant must demonstrate to ASIC that each of these people are ‘fit and proper’ when applying for an AFS or credit licence.
What will ASIC consider when assessing a ‘fit and proper’ person?
To grant an AFS or credit licence, ASIC must have no reason to believe that the applicant is not a ‘fit and proper person’ to engage in the activities authorised by the licence.
Practically, ASIC now requires each ‘officer’ to provide the following:
This allows ASIC to consider:
Licence applicants must also now provide ASIC with an express declaration that there has been no material changes to the person and the information that was lodged to ASIC before a licence is granted.
How will this impact existing licensees?
Even if you already have an AFS or credit licence, you will need to meet the ‘fit and proper person’ test moving forward. If you apply for a variation to your licence ASIC will assess whether all existing and new ‘officers’ are ‘fit and proper’. Consider putting measures in place to ensure you regularly check that ‘officers’ remain ‘fit and proper’. This could include:
If you’re applying for or varying your AFS or credit licence and need help making sure you meet these new requirements, get in touch – we’re happy to help.