An external AFSL compliance review can be a useful tool to ensure an AFSL holder is meeting all the legal requirements. A review can help identify and solve any compliance issues within the business.
What is an AFSL Compliance Review?
An AFSL compliance review is when external consultants evaluate the licensees business to see whether it is following the financial services laws, AFSL conditions and authorisations and ASIC regulatory guidelines.
The licensee can decide on the subject matter and scope of the review. Generally, the review will assess the compliance documentation, policies and processes. Having a clear scope can assist in making the process easier as it ensures that the results cover the issues that instigated the review.
Some examples of areas of external review include compliance governance, compliance training, complaints, disclosures and risk management.
The exact procedure for conducting the review will depend on the reason for the review and any particular requirements made by the licensee. The review will typically assess the compliance policies against the legal requirements and test the degree of compliance with the policies.
After the review is conducted, the licensee will be provided with a report detailing the findings and any recommendations.
When Should Licensees Conduct an AFSL Compliance Review?
An external AFSL compliance review should be conducted regularly as it ensures that the compliance measures continue to be effective.
Most licensees carry out a review at least once every year.
When deciding how often to conduct a review, licensees can take into account the following considerations:
- what financial services and financial products they provide;
- whether any compliance issues have arisen;
- the size of their business; and
- what type of client they provide to.
Conclusion
An external AFSL compliance review can help ensure all the AFSL licence obligations are being met. For more information contact 1300 337 997 or fill out the form on this page.
Lauren is studying a Bachelor of Law and a Bachelor of Business at UTS. She is interested in commercial law, finance and banking law, and property law.
Phil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.
