Notifying ASIC of the change of control of the licensee
If you become aware of a "change in control" of your
financial services licensee, it is a condition of your AFSL that
you must, within 10 business days, lodge with ASIC, in prescribed
form, particulars of the change that has occurred. The Form FS20 is
the prescribed form for notifying ASIC of these changes.
ASIC requires this new information to monitor and ensure that
any new management of a company is still compliant with its
licensing requirements. Subsequently, any entity that is unable to
comply with its licensing obligations after a change in control,
incurs the risk of having its licence suspended or cancelled.
In our experience, ASIC tends to focus on changes in direct
shareholdings of licensees when raising change of control issues.
This is because ASIC keeps records of company shareholdings, and it
is easy for ASIC to show that the AFSL holder should have been
aware of the change.
For example, in June 2015, ASIC suspended the AFSL of retail OTC
derivative provider Australian Capital Markets Advisory Services
Pty Ltd (ACMAS) after the entity became a wholly owned subsidiary
of Formax International Market Limited. The new management failed
to demonstrate their ability to comply with the AFS licensing
Changes of control for companies
There is also an obligation to notify ASIC of changes to details
of the company. These obligations arise under the
Corporations Act and apply equally to all companies, not
Companies must notify ASIC when:
there is change to their register of members (if you have more
than 20 members, you only need to notify ASIC about the top 20
there is a change to the share structure,
there is a change to the directors or secretaries of the
there is a change to the ultimate holding company of a
Such notifications are generally made to ASIC using a Form 484
and need to be made within 28 days of the change.
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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