Licensing for certain service providers
Information about licensing requirements that apply to certain service providers.
Margin lending
The regulation of margin lending, contained in the Corporations Legislation Amendment (Financial Services Modernisation) Act which commenced on 1 January 2010, is part of the Government's national regulation of consumer credit.
The Act requires (among other things):
- issuers and advisers of margin lending facilities to be licensed by ASIC under an Australian financial services (AFS) licence
- advisers to only provide advice that is appropriate to the client's individual circumstances
- margin lenders to meet responsible lending requirements
- consumers to have access to external dispute resolution services, and
- clarity around responsibility for notifying clients in the case of a margin call.
Licensing
From 1 July 2010 issuers of, and advisors on, margin lending facilities cannot provide financial services to retail clients in respect of margin lending facilities until the necessary AFS licence authorisations are obtained.
All licensing, conduct and disclosure requirements apply to providers and financial advisers in relation to margin lending facilities.
Information Sheet 100 Margin lending: Getting or varying an AFS licence (INFO 100)
Australian financial services licence conditions: Pro Forma 209
Pro Forma 209 Australian financial services licence conditions [PF 209] sets out the standard licence conditions which, subject to individual circumstances, will usually be applied to licences authorising a person to provide financial services under an Australian financial services (AFS) licence. The prescribed conditions under reg 7.6.04 of the Corporations Regulations also apply in addition to the conditions in this pro forma.
More information
Further guidance
For information about licensing requirements that apply to certain service providers, see:
Information sheet 100 Margin lending: Getting or varying an AFS licence (INFO 100)
Information sheet 141 Dealing and providing custodial or depository service as secondary service (INFO 141)
Information sheet 198 Extended warranties (INFO 198)
Information sheet 86 How do RSE and AFS licensing application processes work together (INFO 86)
Information sheet 251 AFS licensing requirement for trustees of unregistered managed investment schemes (INFO 251)
Information sheet 253 Foreign financial services providers: Licensing relief (INFO 157)
Information sheet 243 Licensing requirements for providers of funeral expenses facilities (INFO 243)
Information sheet 253 Claims handling and settling: How to comply with your AFS licence obligations (INFO 253)