Fund Manager Compliance | Cowell Clarke Lawyers

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Our team has real, hands-on financial services expertise, gained in private practice and working for Australian Securities and Investment Commission (ASIC) and the Australian Prudential Regulation Authority (APRA). Our practical experience, insights and passion to see financial services businesses thrive set us apart.

Key Steps before Issuing Interests in the Scheme

  • Incorporate a company & obtain an AFSL with the company as manager/trustee
  • Adopt a constitution for the scheme
  • Formalise engagement with service providers
  • Issue an offer document
  • Comply with the obligations of a reporting entity
  • Adopt a privacy policy and privacy compliance plan
  • Obtain relevant certificates from the wholesale investor

Privacy Requirements

  • Must comply with the Privacy Act 1988 on the basis that the trustee is a reporting entity for the purposes of the Anti-Money Laundering and Counter-Terrorism Act 2006
  • Have a readily available Privacy Policy that governs the collection, use, disclosure and management of personal information
  • Establish a privacy compliance plan
  • Establish a procedure where persons can have access to and correct their personal information held by the trustee

Consequences of Breaching your AFSL

For a range of AFSL breaches, administrative action may be taken by ASIC to cancel or suspend your AFSL after offering you a hearing. For providing financial services outside of your AFSL authorisations criminal penalties apply with a strict liability offence which imposes a maximum of 200 penalty units, currently $42,000 or 2 years imprisonment, or both. For accepting conflicted remuneration civil penalties apply with a maximum penalty of $200,000 (for individuals) or $1,000,000 (for body corporates). For this breach, the Court may also ban you from being involved in the financial services industry.

The above does not cover each breach penalty, however it provides an illustration of the extent of consequences that may result from failing to comply with your AFSL obligations.