The Fold lawyer Jaime Lumsden Kelly said in a statement issued yesterday that businesses offering services through a number of entities have two options when it comes to the AFSL regime.
“Certainly one of those options is for each entity providing a financial service to hold its own licence” Ms Lumsden Kelly said.
“This can make it easier to sell parts of the business, but it will multiply compliance tasks.”
Ms Lumsden Kelly said the other option is to have one entity as the AFSL holder and to appoint the other entities as authorised representatives, which can reduce the administration needed for compliance.
However, she warned that this can often have its own complications surrounding which company should hold the licence and whether employees need to be appointed as authorised representatives.
“When making a decision, you need to be mindful of the fact that the entity that holds the licence will need to undertake monthly cash flow forecasts,” Ms Lumsden Kelly said.
“They also need to obtain all the authorisations needed for all the financial services offered throughout the group.
“The thing to remember is that the only employees who need to be formally appointed are employees of companies who are unrelated to the AFS licensee,” she added.
