ASIC allows and recognises outsourcing of functions that relate to the AFS License however the responsibility as the licensee remains with the holder of the license.
Some commonly outsourced functions are:
- information technology (IT) systems for storing records in relation to the provision of financial services;
- recruitment and training of representatives;
- research on financial products in relation to which financial services are provided;
- the operation of call centres;
- periodic compliance reviews of representatives; and
- unit pricing.
Under the Superannuation Industry (Supervision) Act 1993, superannuation trustees retain ultimate responsibility for the operation of the superannuation fund. Under s601FB(1) of the Corporations Act, responsible entities retain ultimate responsibility for the operation of a managed investment scheme.
Under s911B(1), a third party that provides financial services to clients on the licensees behalf, they will generally need to be your authorised representative or hold their own AFS licence. If the third party is a AFS Licensee, it will be held responsible for complying with the general obligations by ASIC.
If functions are outsourced that relate to your AFS license, ASIC expects the licensee to have
- measures in place to ensure that due skill and care is taken in choosing suitable service providers
- monitor the ongoing performance of service providers; and
- appropriately deal with any actions by service providers that breach service level agreements or your obligations as a licensee.
We’re ready to help. This is a specialised area of audit practice, please contact Sandeep Kumar on +61 2 9263 2631 or email@example.com to ensure that you meet your ongoing annual lodgement requirements with the most accurate and correct information needed for submission.