A responsible manager is not deemed to be an officer of the
licensee company by virtue of their appointment as a responsible
In the early days of the financial services reform regime, the
name given to the people, through whom the licensee demonstrated
the competency to provide the authorised financial services, was
"responsible officer". Following concern that this might
suggest that a responsible officer might be considered an
"officer" of the licensee company, ASIC changed the title
responsible manager" to address such concerns.
Whether a person is an officer of a company or not, is not
determined by their title or position. Rather, it is the functions
they perform. Section 9 of the Corporations Act defines an
officer"". The relevant parts of that section define an
a director or secretary of the corporation; or
who makes, or participates in making, decisions that affect
the whole, or a substantial part, of the business of the
who has the capacity to affect significantly the
corporation's financial standing; or
in accordance with whose instructions or wishes the
directors of the corporation are accustomed to act (excluding
advice given by the person in the proper performance of functions
attaching to the person's professional capacity or their
business relationship with the directors or the
Officers of companies have obligations imposed upon them by the
common law, equity and the Corporations Act. Examples of these
obligations imposed by the Act include the duty to exercise care
and diligence, act in good faith, not improperly use their position
for personal gain, etc. Criminal and civil penalty consequences
might be imposed if an officer contravenes these obligations.
role of a responsible manager is to enable the licensee
(usually a company) to demonstrate to ASIC that it has the
competency to provide the authorised financial services. Any other
function or obligations attributable to such persons in
their capacity as responsible manager might arise from
contractual obligations with the licensee but not from the
Accordingly, a responsible manager may or may not be an officer
of the licensee company. Whether they are or not is determined by
the functions they perform, not because they are designated as a
responsible manager of the licensee.
Of course, in many licensees, officers of the licensee company
have been nominated and appointed as responsible managers.
So where does the risk referred to above arise? It will only
arise when a person who happens to be a responsible manager also
carries out functions which might fall within the
"officer" definition set out above.
That being so, if a responsible manager wants to ensure that
they are nor deemed to be an officer of the corporate licensee,
they should ensure that they do not exercise such functions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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