AFSL Solutions for Australian Derivatives Issuers | Pre-licensing Assessment | Derivatives Issuer's AFSL Application Management | Post-licensing Risk and Compliance Support

We offer a comprehensive set of solutions to help you obtain and maintain an Australian Financial Services Licence for Derivatives Issuers (AFSL) issued by the Australian Securities and Investments Commission (ASIC), tailored to:

• Your business goals and objectives
• Your client demographics
• Your countries of operation
• The size of your business
• The available human and technology resources
• Your risk appetite
• Your governance structure
• The products that you offer
• ASIC regulated derivatives issuers' obligations covering risk and compliance management under financial laws and regulations, the applicable financial licensing requirements, AML/CFT laws, privacy laws, consumer protection laws, and more

We have designed our regulatory licensing solutions to help you navigate the complexities of the AFSL framework for derivatives issuers in a commercially oriented and goal-focused manner, providing effective support for all stages of the Australian derivatives issuers’ licensing process, including but not limited to the following aspects:

• Derivatives Issuer’s AFSL Guidance: Advising on a wide range of aspects associated with Australian derivatives issuers' licensing as it relates to your specific situation
• Pre-licensing assessment: Covering compliance gap analysis as well as risk and compliance assessment
• Pre-licensing support:

• Drafting the necessary policies and procedures to help you comply with the derivatives issuer’s AFSL requirements and the derivatives markets' regulations
• Developing internal controls to help you meet your obligations under the AFSL framework for derivatives issuers

• Derivatives Issuer’s AFSL Application Support: Covering the entire licensing process
• Post-licensing Support: Covering

• Ongoing compliance advice
• Comprehensive second-line risk and compliance support, including leading the implementation of your risk management framework (RMF), compliance management framework (CMF), compliance monitoring program (CMP), compliance calendar and checklist, ongoing risk assessments, internal and external reporting, outsourced providers' management, and more
• AML/CFT advice
• AML/CFT compliance management
• Compliance assurance solutions, including compliance assurance program (CAP) development, implementation, and internal control testing

 

Service Coverage

This page is about the Australian Derivatives Issuers' AFSL. In Australia, entities issuing derivatives, including over-the-counter (OTC) derivatives, must obtain an Australian Financial Services Licence (AFSL) from ASIC. This licence authorises them to provide financial services related to derivatives to both retail and wholesale clients. We offer comprehensive support for a wide range of derivatives issuers' AFSL applications tailored to meet the specific needs of the following businesses:

• Exchange-Traded Derivatives Issuers
• OTC Derivatives Issuers
• Non-Retail Derivatives Offerings
• Swaps Execution Facilities and Clearinghouses
• Forex Platforms
• Financial Service Providers Related to Licensed Derivatives Issuers: This includes investment advisers, brokers, fund managers, and more.

You can find more information about our derivative issuer's AFSL solutions below:

 

Derivatives Issuer’s Licensing Preparation

Pre-licensing Compliance Assurance

Our derivatives issuer's AFSL solutions cover the following focus areas:

• Compliance Goals Analysis: We review your business-specific goals and resources against the suitability criteria for a derivatives issuer's AFSL
• Initial Consultation: We provide guidance on potential risk and compliance issues that may arise during the Australian derivatives issuers' licensing process
• Choosing the Right Jurisdiction: We assist in evaluating regulatory, risk, and compliance environments to determine the most suitable jurisdictions for your derivatives issuer’s AFSL, tailored to suit your:

• business objectives,
• operational capacity,
• client base,
• markets of operations,
• and other relevant factors

• Gap Analysis: We identify gaps between your existing operations and regulatory requirements and help you align them in a commercially oriented manner
• Derivatives Issuers’ AFSL Application Plan: We help you establish a roadmap to effectively meet the derivatives issuer's AFSL requirements

 

Derivatives Issuer’s AFSL Guidance

Selecting the right compliance model is crucial not only for navigating the licensing process but also for maintaining ongoing compliance and avoiding potential breaches. Our Australian derivatives issuers’ licensing solution covers:

• Compliance Model Selection: To help you best comply with the AFSL framework for derivatives issuers and related risk and compliance obligations.
• Corporate Governance Model Selection: We offer practical guidance on establishing effective corporate governance practices that support your risk and compliance oversight.
• Operations Model Advisory: We advise you on optimising your operational and governance models to help you efficiently comply with the licensing requirements for derivatives issuers and other applicable ASIC regulated derivatives issuers' obligations, keeping in mind your specific circumstances, available resources and business goals.

 

Entering AFSL Regulated Environment

We help businesses transition from an unregulated environment to operating under the AFSL framework for derivatives issuers, helping them meet their obligations as a derivatives issuer's AFSL holder.

We also assist already regulated businesses in aligning their existing risk and compliance management structures with the AFSL framework for derivatives issuers' requirements. Our focus areas for this service include:

• New businesses
• Existing derivatives issuers operating in unregulated markets
• Derivatives issuers expanding into foreign jurisdictions
• Financial institutions and/or service providers with established risk and compliance frameworks seeking to introduce derivatives trading as a new product.

 

Multi-Jurisdictional Compliance

With years of experience managing risk and compliance obligations for businesses operating under multiple financial licences across various jurisdictions, we help businesses remain compliant with ASIC regulated derivatives issuers’ obligations globally.

 

Derivatives Issuer’s AFSL and Wholesale Markets

Getting a retail derivatives issuer's AFSL may not always be the best fit for all. For example, a retail market expansion may not always align with your goals or the products you offer.

Operating in the wholesale environment can sometimes be a more suitable option. We offer a wider range of risk and compliance management solutions to assist derivatives issuers that:

• Operate in the wholesale markets
• Operate under an AFSL limited to wholesale client authorisations
• Offer services to sophisticated, eligible, and wholesale investors

We help these issuers manage compliance obligations that continue to apply under the wholesale-only AFSL framework, including:

• Financial and resource requirements under the Corporations Act
• Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) compliance
• Transaction reporting under ASIC Derivative Transaction Rules
• Client classification and product governance obligations
• Marketing and promotional restrictions for retail offers
• Governance, risk management, and outsourced provider oversight

 

Derivatives Issuers’ AFSL Application

We can assist with your derivatives issuers' AFSL application through ongoing engagement in the Australian derivatives issuers’ licensing process:

• Document Compilation and Review: We compile and review all required supporting documents to support your derivatives issuers' AFSL application.
• Application Form Completion: We help you complete the forms so that all material information is accurate and complete.
• Pre-Submission Review: We can arrange a pre-submission review session with key stakeholders to ensure all parts of your AFSL application are understood and agreed upon. This session aligns application details with the actual situation, removing ambiguity.
• Regulatory Liaison: We manage the end-to-end submission process, maintaining clear and effective communication channels throughout the Australian derivatives issuers' licensing.
• Timeline Management: We closely monitor and adhere to all necessary deadlines, providing timely updates and adjustments to keep the AFSL application process on track.

 

Resolving Derivatives Issuer’s AFSL Issues

Having competent compliance advisors is crucial when licensing issues arise. Therefore, our derivatives issuer's AFSL solutions include a range of services to address and resolve these issues effectively:

• Remediation Solutions for Derivatives Issuers’ AFSL Applicants: We address and remediate risk and compliance issues identified by regulators, helping your operations align with derivatives issuers' regime requirements.
• Specific AFSL Conditions Compliance: We can help you manage additional conditions imposed on your derivatives issuer's AFSL, developing a tailored action plan to maintain compliance and facilitate the eventual removal of these conditions with minimal disruption to your business operations.
• Licensing Issues Handling: We address common licensing issues encountered during the Australian derivatives issuers' licensing process, providing you with solutions to navigate and resolve these challenges efficiently.
• Further Information: You can visit our Compliance Remediation Solutions page for more information.

 

Post-Licensing Support

We offer a full range of ongoing risk and compliance solutions for licensed derivatives issuers. Our services include but are not limited to:

Ongoing Risk and Regulatory Compliance

• ASIC regulated derivatives Issuers' Obligations Guidance: We can advise your risk, compliance, management and other teams on meeting the requirements of the AFSL framework for derivatives issuers and other regulatory compliance obligations. You can visit our Compliance Consultancy Service page for more information.
• Regulatory Risk and Compliance Management: We provide dedicated compliance managers to manage your overall compliance. For more information, visit our Specialised Compliance Management Solutions page for Derivatives Issuers.
• Compliance Assurance Solutions: As part of our compliance assurance solutions, we offer:
• Compliance Assurance Program (CAP) development and testing options
• Internal Controls Design option
• Internal Controls Testing option
• Internal AML/CFT Review option
• Statutory AML/CFT Audit option
• Compliance Training Solutions: We offer training programs to different teams on complying with:
• ASIC regulated derivatives issuers’ obligations for risk, regulatory compliance management, and derivatives trading regulations. You can visit our Compliance Training page for more information.
• Derivatives issuers’ AML/CFT obligations and operational best practices for fraud prevention. You can visit our AML/CFT Training page for more information.
• Crisis Management Planning: We can develop proactive strategies to manage potential compliance crises effectively.
• Anti-Money Laundering (AML) and Counter Terrorist Financing Solutions: We provide a full range of AML/CFT solutions for derivatives issuers. For more information, visit our Specialised AML/CFT Solutions page for Derivatives Issuers.
• Advanced Compliance Technologies: We can assist you with selecting and integrating advanced technology solutions, such as compliance automation tools and regulatory technology (RegTech), to streamline compliance processes without disrupting operations.
• Risk and Compliance Framework Adjustments: Including adjustments to risk management frameworks (RMFs), compliance monitoring programs (CMPs), compliance management frameworks (CMFs), and other core procedures and policies to align them with:
• new business goals
• regulatory changes
• changes in your operations
• evolving market conditions
• changes in stakeholders’ risk appetites (your banking partners, insurance companies, liquidity providers, etc.).

 

 

Risk and Compliance Obligations for Derivatives Issuers’ AFSL Holders

Derivatives issuers’ AFSL holders are subject to various obligations set out in applicable laws and regulations. They are also expected to uphold standards for their conduct and internal operations, as outlined in regulatory guidance or accepted industry practices.

We can help you address these obligations and expectations through comprehensive support in the different areas. The list below is not exhaustive:

Derivatives Issuer’s AFSL and Regulatory Compliance Obligations

• Compliance Management Systems: We can help you establish effective compliance programs, compliance monitoring plans, controls testing methodologies, compliance calendars and more (as required under RG 104).
• Risk Management Frameworks: We can help you develop comprehensive risk management frameworks to fulfil ASIC regulated derivatives issuers’ obligations for identifying, assessing, and mitigating operational, regulatory, strategic, financial and other types of risks (as required under RG 259).
• Policy and Procedure Development: We can help you draft and implement policies and procedures aligned with the Australian derivatives issuers’ licensing requirements.
• Compliance Monitoring Plans: We can oversee the execution of your CMPs, covering ongoing monitoring of your compliance obligations under the AFSL framework for derivatives issuers.
• Internal Control Testing and Compliance Assurance: We can conduct internal reviews and audits of your controls to test their effectiveness and compliance with the applicable regulatory standards.
• Capital Adequacy Requirements: We can help you implement controls to comply with capital adequacy requirements, helping your businesses meet ASIC regulated derivatives issuers' obligations for maintaining required financial resources.
• Liquidity Management Requirements: We can assist you in developing controls to comply with liquidity management requirements (as required under RG 166).
• Financial Auditing Standards: We can assist in establishing procedures to help you comply with the audit and assurance requirements under the AFSL framework for derivatives issuers.
• Regulated Counterparty Engagement: We can help you develop controls to comply with ASIC regulated derivatives issuers’ obligations that restrict engagement with non-regulated financial service providers.
• Automated Trading Regulations: We can aid you in developing controls to meet automated trading regulations, including compliance with algorithmic trading rules and reporting requirements.
• Commodity Trading Regulations: Commodity Trading Regulations: We can help you establish controls to follow commodity trading regulations and obligations.
• Digital Payment Token Services: We can assist in developing controls to comply with regulations for digital payment tokens, cryptocurrencies, and digital assets, including obligations under the AFSL framework for derivatives issuers and AML/CFT requirements for transaction monitoring and reporting.

 

Derivatives Issuer’s AFSL and Operational Oversight Obligations

• Oversight of Outsourcing: We can establish a set of effective controls to comply with Australian derivatives issuers’ licensing obligations for overseeing outsourced services (as required under RG 104 and RG 105), also covering related obligations under AML/CFT compliance, ISO requirements, and more.
• Structures for Governance: We can help you establish effective governance structures to comply with ASIC regulated derivatives issuers' obligations and develop an effective approach to overseeing your risk exposure and compliance status across different functions of your business.
• Senior Management Accountability: We can help you comply with ASIC regulated derivatives issuers’ obligations for senior management and key staff conduct and competence.
• Maintaining Operational Resilience: We assist in developing continuity plans to meet ASIC regulated derivatives issuers’ obligations for operational resilience, helping critical business services withstand disruptions (as required under ASIC Report 708 and other publications).
• Managing Technology Risks: We provide guidance on technology risk management obligations under the AFSL framework for derivatives issuers.
• Monitor staff and authorised representatives involved in derivatives services.
• Retail Client Onboarding Controls: We can help you implement onboarding controls for retail clients, including disclosure, suitability assessments, and clear classification of clients under the Corporations Act (Corporations Act 2001, Chapter 7).

 

Derivatives Issuer’s AFSL and Market Integrity/Transparency Requirements

• Standards for Market Conduct: We can help you implement controls for ASIC regulated derivatives issuers’ obligations to maintain fair and transparent market conduct, including preventing manipulation and insider trading.
• Principles for Fair Treatment: We can help you implement controls to comply with expectations that cover adherence to principles of fair treatment and transparent communications with clients.
• Standards for Conduct and Disclosure: We can help you comply with Australian derivatives issuers’ licensing standards for conduct and disclosure.
• Product Suitability and Governance: We can establish tailored controls to help licensed derivatives issuers comply with product suitability and governance obligations, including risk management and governance arrangements across the product life cycle.
• Protection of Client Assets: We can help you comply with Australian derivatives issuers' licensing obligations to protect and segregate client assets.
• Resolution of Disputes: We can help you establish effective mechanisms for dispute resolution and complaints management, particularly for retail clients (as required under the ASIC RG 165).
• Design and Distribution Obligations (DDO): We can help you implement product governance controls for complying with ASIC’s design and distribution obligations applicable to derivatives offered to retail clients (RG 274).

 

Derivatives Issuer’s AFSL and Resource Management Obligations

We can help you comply with the following requirements of the AFSL framework for derivatives issuers:

• Adequacy of Resources: Covering financial, technological, human and other resources.
• Competence of Professionals: Covering key personnel, their necessary skills, knowledge, and professional competence.
• Our focus areas include:
• Assessment and Gap Analysis: We can help you evaluate the adequacy of your financial, technological, and human resources against the requirements of the licensing regime.
• Resource Allocation Plans: We can help you develop strategies to optimise resource allocation, covering sufficient capacity for compliance, trading, operations, banking, customer support and other functions and departments.
• Technological Solutions: We can recommend and implement RegTech tools to streamline compliance processes, such as transaction monitoring, reporting, and audit trails.
• Key Personnel Assessment: We can help you assess the skills, qualifications, and experience of key personnel to identify areas for improvement.
• Training and Development Programs: We can design and deliver targeted compliance training programs to upskill personnel in compliance, risk management, and derivatives trading regulations.
• Competence and Accreditations of Advisors and Representatives: We can advise you on certifications and continuing professional development (CPD) requirements for compliance professionals and senior management.
• Representative Vetting: We can help establish a framework for assessing the competence and suitability of advisors and representatives before appointment.
• Compliance Monitoring: We can help develop controls to monitor representatives' adherence to conduct and disclosure obligations.
• Ongoing Training: We can help you create a framework to support continuous education for advisors and representatives on licensing obligations, market integrity, and client interaction standards.
• Regulator Liaison: We can act as an intermediary with regulators to address queries and help you demonstrate compliance with resourcing obligations.

 

Derivatives Issuer’s AFSL and Reporting

• Regulatory Reporting: We can help you prepare and submit periodic and ad-hoc reports covering:
  • Australian Derivatives issuers' licensing obligations
  • Australian Derivatives issuers’ AML/CTF obligations (SMRs, cross-border transaction reports (IFTIs), cash transaction reports TTRS, and other reporting obligations)
  • ASIC Regulated Derivatives issuers' obligations under financial market conduct regulations
  • Specific transaction reporting to relevant depositories
• Compliance Documentation: We can help you develop and maintain the necessary documentation to meet record-keeping obligations under various laws and regulations.
• Audit Readiness: We can prepare you for audits and reviews to demonstrate compliance with regulatory requirements, provisions of the AFSL framework for derivatives issuers, applicable operational standards, and more.

 

Related Licensing Solutions

We can help you apply for the derivatives issuer's AFSL or its equivalents in the following jurisdictions:

• New Zealand: For more information on the New Zealand equivalent of the derivatives issuers' AFSL – Derivatives Issuer’s FMA Licence, as well as Financial Service Provider (FSP) registration for non-retail derivatives offerings, you can visit our New Zealand Derivatives Issuer’s Licence page.
• United Kingdom: For more information on the United Kingdom derivatives issuers' AFSL equivalent – FCA Authorisation for Regulated Derivatives Activities, you can visit our FCA Authorisation page.
• Singapore: For more information on the Singaporean derivatives issuers' AFSL equivalent – Capital Markets Services (CMS) Licence for dealing in derivatives contracts, you can visit our Capital Markets Services (CMS) Licence page.
• Other Jurisdictions: We also offer derivatives issuers’ licensing solutions for prominent financial centres and offshore tax havens, including but not limited to:

• British Virgin Islands: Where licensed derivatives issuers are supervised under the Securities and Investment Business Act, 2010 (SIBA) by the British Virgin Islands Financial Services Commission (BVI FSC).
• Cayman Islands: Where derivatives activity is regulated under the Securities Investment Business Act (2020 Revision) by the Cayman Islands Monetary Authority (CIMA).
• Seychelles: Where derivatives issuers are licensed under the Securities Act, 2007 by the Seychelles Financial Services Authority (FSA).
• Mauritius: Where derivatives dealers are licensed under the Securities Act 2005 by the Mauritius Financial Services Commission (FSC).