AFSL Application: What ASIC Assesses and Why Applications Stall

Under s 913B(1) of the Corporations Act 2001, ASIC must grant an AFS license when the application is properly made, ASIC has no reason to believe the applicant is likely to breach its general obligations under s 912A, and the people behind the business pass the fit and proper test. Three tests decide whether an AFSL application gets there: whether your responsible managers can demonstrate competence for every authorization you select, whether your answers describe the business you will run, and whether you can evidence the financial resources those authorizations require.

Few applications end in a refusal. ASIC can refuse only after offering a private hearing (s 913B(5)), and most unsuccessful applications end before that point: ASIC declines to accept them for lodgement, the applicant withdraws, or the law treats the application as withdrawn because a response deadline passed (s 913B(4B)). Digital asset businesses relying on ASIC's no-action position have until September 30, 2026 to lodge or take another qualifying step.

What an AFSL Application Actually Consists Of

Since June 16, 2025, applying for an AFSL means completing one online transaction in the ASIC Regulatory Portal. It collects structured answers about the applicant and its business, the services and products to be authorized, the fit and proper people and responsible managers, and how the applicant will meet a licensee's obligations. You upload People Proofs, pay a fee the portal calculates from the authorizations you select, and cannot change an answer after you submit (INFO 294). RG 1 Applying for and varying an AFS licence explains what ASIC asks and why; it replaced RG 2 and RG 3 in June 2025.

Most AFSL requirements in Australia attach to the authorizations you pick. The portal builds its questions from them, ASIC measures your responsible managers against them, and RG 166 hangs financial requirements on them that apply for as long as you hold the authorization, used or not (RG 166.27). Adding retail clients brings internal dispute resolution, AFCA membership and compensation arrangements (RG 1.41-1.43). An authorization added in case you need it later can raise the fee and industry funding levies and lengthen the assessment (RG 1.47). A missing one leaves part of the business unlicensed (RG 1.46).

ASIC can narrow a list that goes too far: in 2024-25 it granted authorizations different from those sought, or refused one, 68 times across new and variation applications (REP 825). It cannot repair a list drawn around the wrong business model, and every question, manager and dollar in the application follows from that list. If the open question is still whether your activity needs a license at all, start with our guide to when an AFSL is required.

Responsible Managers: The Test That Decides Most Applications

The AFSL responsible manager requirements sit in RG 105. Each responsible manager must be directly responsible for significant day-to-day decisions about your financial services, and together they must hold the knowledge and skills for every service and product on the license (RG 105.8). ASIC generally expects at least two (RG 1.174). Each person must also meet one of five options, satisfying both its knowledge and its experience component (RG 105.54).

The word that decides most cases is "relevant." Experience counts when it matches the authorizations sought, and it has to be practical: deciding how the services are provided, and providing or supervising them (RG 105.57). In ASIC's own example of a manager it would not accept under Option 5, ten years in regulatory affairs and compliance and two years of wholesale deposit-product work did not carry over to a marketplace lending business funded by issuing securities (RG 105, Example 4). RG 105.23 names compliance managers and financial controllers as roles that might lack the direct responsibility the position needs.

Coverage is collective, with two rules that catch fund managers and custodians. An operator of a registered or unregistered scheme needs a manager who knows how to operate the scheme and a manager, the same person or another, who knows the assets it holds (RG 105.44). A custodian needs managers who know custody and the assets it will hold (RG 105.48). ASIC's default for a new responsible entity is an authorization limited to a named scheme, and asset-kind authorizations follow at least two years of problem-free operation (RG 1.61-1.62).

ASIC also tests time. It weighs a candidate's other commitments, including responsible manager roles at other licensees and work as a lawyer, accountant or consultant (RG 105.27), and a candidate who already serves another licensee needs a plan for splitting time and managing conflicts (RG 1.179). A consultant who lends a name to several licenses and makes no day-to-day decisions in yours fails RG 105.22 whatever the CV says.

Foreign groups meet this test at its hardest point. RG 105 accepts overseas experience and comparable overseas qualifications, and lists the FCA, SFC and MAS among the regulators whose recognized qualifications count (RG 105.87-105.92). The gap sits in the Australian link: knowledge of Australian law, a real share of the Australian entity's decisions, and time to exercise it. The overseas manager ASIC says it may accept under Option 5 had six years of regulated UK experience, a year with an Australian securities adviser and a course on Australian financial services law (RG 105, Example 2). Where a foreign degree's equivalence is in doubt, an International Education Online assessment can take up to three months (RG 1.186), which belongs in the timeline before lodgement.

ASIC's figures show where the pressure lands. Of the 467 additional outcomes ASIC imposed on approved AFS applications in 2024-25, 302 were key person conditions, which tie the license to named managers; 11 approvals involved appointing an additional responsible manager, and 2 managers were rejected outright (REP 825). Analysts ask for an alternative manager during assessment where they can, so a weak candidate costs time: a replacement means new People Proofs and another round of questions. If competence still falls short, ASIC can refuse the application or grant narrower authorizations (RG 105.97).

AFSL Proof Documents: What Replaced Core and Non-Core Proofs

ASIC dropped core and non-core proofs when AFS applications moved to the Regulatory Portal on June 16, 2025. The only proof documents left are People Proofs (INFO 294). For each fit and proper person and each responsible manager, you provide a national criminal history check, criminal history and bankruptcy checks from every other country the person lived in for more than 12 months in the last 10 years, and a signed Statement of Personal Information, all no more than 12 months old (RG 1.149). Responsible managers add their qualification certificates, and anything not in English needs a certified translation (RG 1.150).

For a foreign group, People Proofs multiply with every person and every country. The fit and proper test covers the applicant's officers and anyone who controls it (RG 1.141-1.142). Where a country issues no such check, a statutory declaration describing the attempts to get one stands in (RG 1.162, RG 1.166). Officers of an intermediate holding company can be covered by a certification, and officers of the ultimate holding company cannot (RG 1.151-1.152), although ASIC may accept evidence that they already sit under an equivalent fit and proper regime elsewhere (RG 1.154).

Everything that used to travel as a proof document is now an answer. ASIC asks how you earn income, which clients you serve, where you operate and how you will supervise compliance there, and what you outsource and to whom (RG 1.36), and it recommends diagrams of the business model and money flows (RG 1.37). For conflicts, risk management and complaints handling it wants summaries, and it tells applicants not to send manuals because it will not review them (RG 1.224, 1.228, 1.232).

With manuals out of the file, your answers carry the evidential weight. The business description, the money flows, the outsourcing answers and the compliance summaries have to describe one business, and the systems behind each summary have to be in place when you apply, because the obligations apply from the first day of the license (INFO 294). ASIC can ask for supporting material at any stage of the assessment (RG 1.192) or require it by written notice (s 913B(3)). An application that proves false or misleading in a material particular, or leaves out a material matter, obliges ASIC to refuse (s 913B(2)).

Financial Requirements by Authorization Type

AFSL financial requirements start with a base that every licensee under RG 166 meets, APRA-regulated bodies aside: stay solvent with total assets above total liabilities, hold enough cash resources to meet projected expenses, and have your auditor report every year on compliance with the financial requirements (RG 166.30). For most applicants the cash test means a documented projection of cash flows over at least the next three months, either backed by a cash buffer of 20% of three months' outflows or built on commercial contingencies; members of corporate groups and bank subsidiaries can rely on parent or bank support instead (RG 166, Table 3). Everything above the base depends on the authorizations you hold.

A responsible entity holds at least half of its NTA requirement in cash or cash equivalents, with a minimum of A$150,000, and all of it in liquid assets; IDPS operators and corporate directors of retail CCIVs follow the same NTA test (CP 388). Responsible entities, IDPS operators and custodians also meet tailored versions of the cash needs and audit requirements (RG 166, Table 2). ASIC checks the money late: it asks for financial statements and evidence that you meet the applicable requirements once it has decided in principle to offer a draft license, and grants the final license only if it is satisfied (RG 1.212). A funding gap found at that stage holds up an application that has cleared every other test.

For fund managers applying for an AFSL, custody moves the number more than anything else. A responsible entity that keeps scheme assets itself faces the A$10 million floor unless the assets fall in an exempt class. The same entity starts from A$150,000 if all fund assets are held by an eligible custodian (an Australian ADI, a market or clearing participant, or their sub-custodian) or by a custodian that meets the licensed-custodian financial requirements (CP 388, paragraphs 3-5 and 29-31). RG 1.69 points a wholesale fund trustee to a dealing authorization and a custodial one, possibly as an incidental provider; the trustee carries the incidental-provider NTA if it holds the assets and none if a separate qualifying custodian does. The retail thresholds are about to rise. On July 30, 2026, ASIC announced that the minimum NTA thresholds for responsible entities, IDPS operators and corporate directors of retail CCIVs will increase in line with inflation from July 1, 2027, with annual indexation after that. Its March 2026 consultation paper estimated the inflation-adjusted A$10 million floor at about A$13.8 million and the A$150,000 floor at about A$200,000 (CP 388). ASIC will set the final figures, including the first indexation, when it amends Instrument 2023/647 and RG 166.

How Long an AFSL Application Takes

No statute sets a deadline for ASIC to decide an AFS license application, although the law gives ASIC 14 days to register a managed investment scheme once it has a complete application. ASIC's service charter aims to decide 70% of complete AFS license applications within 150 days and 90% within 240 days. In 2024-25 it decided 77% of new license applications within 150 days and 91% within 240 days (REP 825). The report gives no median, and 217 of the 643 new applications under assessment during the year were still open at June 30, 2025.

Where an application lands in that range depends on three stretches of time. The charter clock runs from a complete application, so preparation sits outside it, including People Proofs from several countries and, where needed, a qualification equivalence assessment of up to three months (RG 1.186). During assessment, ASIC names complex or novel policy issues and missing information as causes of delay (service charter), along with the quality of what you provide, its analysis of your business and the market you plan to enter (INFO 294). After the in-principle decision comes the requirements stage: professional indemnity insurance for retail business, which RG 1.240 warns can take several weeks or longer to obtain, AFCA membership and the financial evidence. A responsible entity then lodges its scheme for registration, no earlier than the draft license and within four months of it, and gets the final license and the registered scheme on the same day (INFO 294).

Why AFSL Applications Stall, Lapse or Get Withdrawn

ASIC's licensing report for 2024-25 shows how applications end. Of 419 new AFS license applications finalized in the year, 290 ended with a license and 129 without one (REP 825). Across all AFS and credit license applications, new and variations, ASIC recorded 187 withdrawals and 138 applications it did not accept for lodgement. Refusals are the rare outcome: ASIC's 2021 licensing report counted one for 2020-21 across AFS and credit licenses, against 391 withdrawals and lodgement rejections. Before refusing, ASIC refers the application to a delegate, who writes to the applicant and offers a private hearing (s 913B(5)), and an applicant who withdraws at that point forfeits the fee (INFO 294).

[Graphic: where AFSL applications stall]

ASIC can refuse to receive an application (s 1274(8)), and a document it refuses to receive is not lodged. The 138 applications not accepted for lodgement fall here, and each one means starting again.

Responsible managers whose experience does not match the authorizations lead to a request for an alternative manager or an offer of narrower authorizations, and each round adds time. Left unresolved, the gap ends in refusal under s 913B(1)(b) (RG 105.97).

Answers that describe a different business from the one you run draw questions, which ASIC can formalize in a written notice under s 913B(3). If ASIC concludes the application was false or misleading in a material particular, or left out a material matter, it must refuse (s 913B(2)).

Financial resources that do not match the authorizations surface late, at the requirements stage (RG 1.212). If the financial evidence, the PI insurance or the AFCA membership is not in place by the date in the requirements letter, ASIC may withdraw its offer of a license (INFO 294).

A notice left unanswered ends the application. Miss the deadline in a notice under s 913B(3) and the law treats the application as withdrawn, with no hearing (s 913B(4B)-(4C)), no right of appeal and no refund of the fee (INFO 294). An extension has to be requested before the due date, because ASIC cannot grant one after it (INFO 294).

A business model that changes mid-assessment cannot be written into the application, since a submitted application cannot be edited (INFO 294). Before granting, ASIC asks you to confirm there have been no material changes (s 913B(3)(c)), and a false confirmation is grounds to cancel the license (INFO 294). A new model means disclosure and a new round of questions. If it needs authorizations you did not select, the paths are a variation after the grant or a fresh application, and a withdrawal after acceptance forfeits the fee.

Equilex prepares AFS license applications from the authorization list through the requirements letter. See how we handle AFSL applications and book a call; we reply within 24 hours.

Digital Asset Firms Applying Before September 30

Firms relying on ASIC's no-action position that take the application route have to lodge by September 30, 2026. From October 1, ASIC has said, firms that need a license and have not met the position's conditions risk breaching financial services law. The deadline, the qualifying routes and the conditions attached to lodgement are covered in our news piece on ASIC's final call.

The cover lasts only as long as the application does. Under ASIC's class no-action letter of June 25, 2026, an applicant's cover runs until ASIC refuses to receive the application, the applicant withdraws it, ASIC refuses it, or ASIC grants the license (paragraph 1(b)(i)). Three of the failure points above end the cover on the day they happen: a refusal to receive, a refusal to grant, and a withdrawal, including the one the law deems after an unanswered notice (s 913B(4B)). A business that keeps providing in-scope services after that date does so unlicensed.

These applications also start with less precedent than most. ASIC granted its first AFS license to a stablecoin issuer in May 2025 (REP 825), so answers on token classification, custody and money flows have few accepted models to follow, and ASIC's service charter warns that novel policy issues lengthen an assessment. ASIC holds pre-assessment meetings for novel or complex applications (REP 825). A business that holds clients' digital assets that are financial products provides a custodial service, and the custody NTA in the table above follows that authorization.

The choice between the two Australian regimes is covered in AFSL or VASP registration. AML/CTF obligations with AUSTRAC run on a separate track, set out in our guide to AUSTRAC registration requirements.

After the License Is Granted

The license arrives with the standard conditions in PF 209 and any tailored conditions settled during assessment, key person conditions among them (INFO 294). The general obligations in s 912A apply from the first day, and RG 104 explains how ASIC assesses them. The first deadlines come fast: a proprietary company appoints an ASIC-registered auditor within one month (s 990B), each authorised representative appointment goes to ASIC within 15 business days (s 916F), and ASIC can cancel a license under which no financial service starts within six months (s 915B).

The recurring work sits in three places. Financial requirements apply continuously, including for authorizations you are not using, and your auditor reports on them every year with the annual financial statements (s 989B; RG 166.62-166.64). Changes and events go to ASIC: responsible managers joining or leaving, changes of control (s 912DA), reportable situations (s 912DAA) and any event that may cause a material adverse change in your financial position (reg 7.6.04(1)(a)). Competence has to be maintained: RG 105.10 expects you to review it regularly and whenever managers or activities change, keep managers' knowledge current, and keep records of both.

Responsible manager departures need a plan from the first day. If a key person leaves, you lodge a variation within five business days and nominate a qualified replacement (RG 1, Example 2), and ASIC imposed 302 key person conditions in 2024-25 alone. ASIC's surveillance can test the same competence it assessed at the grant, and a licensee that loses it faces new conditions, suspension or cancellation (RG 105.13-105.14).

FAQ

How many responsible managers does an AFSL applicant need? ASIC generally expects at least two responsible managers (RG 1.174). It accepts one in limited cases, such as a one-person advisory business or an applicant whose main business is not financial services, and then names that person in a key person condition (RG 105.51-105.52). Beyond two, the number follows the authorizations: together, the managers must cover every one.

Can a responsible manager be based outside Australia? Yes. RG 105 sets no residency rule. ASIC tests whether the person makes significant day-to-day decisions about the Australian business and has time for it (RG 105.22-105.27), and whether their experience maps to the authorizations sought. Overseas qualifications must be shown comparable to Australian ones, and advice roles call for an Australian short course (RG 105.87-105.93).

How long does an AFSL application take? No statute sets a deadline. ASIC aims to decide 70% of complete applications within 150 days and 90% within 240 days, and in 2024-25 it reached 77% and 91% for new licenses (REP 825). Preparation before lodgement comes on top, and so does the requirements stage after in-principle approval, when PI insurance, AFCA membership and financial evidence fall due.

What are proof documents in an AFSL application? Since June 16, 2025, the only proof documents ASIC takes are People Proofs: criminal history checks, bankruptcy checks for each country outside Australia where the person lived more than 12 months in the last 10 years, a signed Statement of Personal Information and, for responsible managers, qualification certificates. Core and non-core proofs became questions in the online application.

What happens to a digital asset firm that does not file by September 30, 2026? It falls outside ASIC's no-action position. From October 1, providing in-scope financial services without an AFS license, an authorised representative appointment or another exemption risks breaching s 911A(1) of the Corporations Act, and ASIC has pointed to penalties of up to 10% of annual turnover. An application lodged after the deadline does not restore the cover.