Six months of inactivity in your AFSL or ACL? ASIC has the Power to Immediately Cancel it

ASIC has been regularly enforcing its powers to cancel both Australian Financial Services Licences ("AFSL") and Australian Credit Licences where the licensee fails to commence its business within six (6) months of the licence being granted by ASIC, or ceases to provide financial or credit services.

Important Points

ASIC has the ability to immediately cancel an AFSL or Credit Licence where the licensee:

has not commenced its business within six (6) months of being granted an AFSL or Credit Licence; or
has ceased to operate a financial services or credit business.

Inactivity Type

Relevant Provisions of the Corporations Act

Relevant Provisions of the National Consumer Credit Protection Act

The licensee has not commenced its business within six (6) months of being granted an AFSL or ACL

Body corporate Licensees: s915B(3A)

This power also applies to licensees which are partnerships, individuals and trustees.

Section 54(1A)

The licensee has ceased to operate a financial services or credit business

Body corporate Licensees: s915B(3)(a)

This power also applies to licensees which are partnerships, individuals and trustees.

Section 54(1)(b)

What are licensees required to do?

If you are a body corporate, ASIC may cancel your AFSL or credit licence by giving written notice if you have not provided financial or credit services as authorised under the licence within six (6) months of it being granted.

Licence holders can request an extension of time from ASIC if they are unable to commence their financial or credit business during the six (6) month period after being granted their AFSL or credit licence. This extension should be sought within fifteen business days following the conclusion of the initial six (6) month timeframe. This is a requirement under section 912DB of the Corporations Act and section 53B of the Credit Act.

ASIC does not expect licensees who are providing some, but not all, of the products or services authorised under its licence to lodge a notification. It is at ASIC's discretion to cancel a licence, and ASIC may work with licensees if there are genuine reasons for not commencing business six (6) months after being granted a licence.

Prospective Licensees

Those seeking to apply for an AFSL or Credit Licence should ensure:

That any authorisations being sought will be utilised within six (6) months;
A clear business plan is in place which outlines the specific operations of the proposed business;
Future plans for the operations of the business have been considered, including the timing for those plans;
Appropriate human, financial and technological resources are in place (or can be in place prior to the submission of a licence application);
Any technology, including websites, applications or platforms which are required to provide the financial services under the AFSL or Australian Credit Licence are being developed and will be finalised and ready to launch within six (6) months of the licence being granted.

Existing Licensees

Given ASIC's recent enforcement action in this space, existing licensees should ensure they are actively using all the authorisations on their licence or are ready to do so within six months of receiving their licence.

How to Notify ASIC

AFSL and Credit Licence holders are required to lodge a written notification with ASIC in the form of a letter. The letter must include the following information:

a statement that the licensee has, or will have, failed to commence a financial services business/credit business within the required timeframes;
the reasons why the licensee has not commenced operating its business;
the date by which the licensee expects to commence operating its business;
a statement about any changes to the products and services the licensee intends to provide under the licence since the licence was granted (if any); and
a statement about how the licensee will continue to satisfy the general obligations of a licensee.

The notification can be emailed to the following ASIC contacts:

Licensing.AFSLProofs@asic.gov.au for AFSL holders; or
Licensing.Credit@asic.gov.au for Credit Licence holders.

ASIC's Recent Enforcement Action

ASIC's recent enforcement action reflects its commitment to ensuring that AFSL and credit licence holders actively engage in providing financial services and comply with their regulatory obligations.

ASIC cancelled the licence of SME Crowdfunder Pty Ltd and the licence of Thistle Financial Group Pty Ltd with immediate effect in May 2025, when they determined that the companies had ceased to carry on a financial services business.

In January 2024, ASIC cancelled the licence of Sydney based financial services provider, Indie Advice Pty Ltd. ASIC exercised their power under section 915B(3) of the Corporations Act 2001 to cancel the AFS licence without the need for a hearing after determining the company had ceased providing financial services.

In May 2023, ASIC cancelled the AFS Licence of Centurion Custodian Funds Management Ltd ("Centurion") due to inactivity. Centurion failed to provide any financial services under its licence which was issued in May 2005. In January 2023 Centurion applied to the Administrative Appeals Tribunal ("AAT") seeking a review and stay of ASIC's decision. The AAT refused the stay application and in July 2023 affirmed ASIC's decision.

Valorton Capital Pty Ltd and LRA Corporate Pty Ltd are further recent examples from 2024 and 2025 of ASIC enforcing their power granted under S915B where a business fails to commence providing services after 6 months of their licence being granted or where the businesses have ceased to provide financial services.

Background Information

This power came into effect in February 2020 after public comment made in response to the ASIC Enforcement Review Taskforce Report ("Taskforce Report") in 2017.

Previously, ASIC's powers in the AFSL and Credit Licence regime only allowed ASIC to suspend or cancel licences if the licensee ceased to commence a financial or credit services business. These powers did not include the ability to suspend or cancel licences in the event that licensees were not providing financial or credit services as authorised after the granting of a licence. The recommendations by the Taskforce Report were made in response to uncertainty as to when a business should commence operation after obtaining a licence. The need to strengthen these powers was also imperative as licensees were capitalising on licences and selling them to persons who may not have met the requirements to hold an AFSL or Credit Licence.

This power also applies to the following:

Individuals – Corporations Act 2001 (Cth) s915B(1A)
Partnerships – Corporations Act 2001 (Cth) s915B(2A)
Trustee of a Trust – Corporations Act 2001 (Cth) s915B(4A)

Six months of inactivity in your AFSL or ACL? ASIC has the Power to Immediately Cancel it

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