ASIC changes requirements for use of lease assets
The Australian Securities and Investments Commission (ASIC) has changed the financial requirements for some types of the Australian financial services (AFS) licensees by allowing them to use lease assets to satisfy their licence financial requirements.
These changes would mean that certain AFS licensees would be able to include, where the licensee was a lessee, a right-of-use asset in the calculation of their net tangible assets and, where the right-of-use asset was a current asset, adjusted surplus liquid funds and surplus liquid funds.
ASIC also modified existing AFS licence conditions so that a right-of-use asset would be deemed to not be an excluded asset.
Under s 912A(1)(d) of the Corporations Act 2001, an AFS licensee was generally required to maintain adequate resources, including financial resources, to provide the financial services that it is authorised to provide under the terms of its AFS licence.
To implement the changes, ASIC updated the following documents:
- ASIC Class Order [CO 13/760] – Financial requirements for responsible entities and operators of investor directed portfolio services,
- ASIC Class Order [CO 13/761] – Financial requirements for custodial or depository service providers,
- ASIC Class Order [CO 12/752] – Financial requirements for retail OTC derivative issuers,
- the standard licence conditions in ASIC Pro Forma 209 – Australian financial services licence conditions, and
- ASIC Regulatory Guide 166 – Licensing: Financial requirements.
The regulator previously issued a temporary no-action position for AFS licensees in relation to potential breaches of the financial requirements that arose from recent changes to the accounting treatment of lease assets, however the no-action position would no longer apply.
AUTHOR
Oksana Patron
Recommended for you
Centrepoint Alliance has the opportunity to sneak up from behind while the three major licensees are distracted as chief executive John Shuttleworth tells Money Management that it aims to “be stable in a sea of turmoil”.
The financial advice profession has seen double-digit adviser losses over the past week, including six advisers who departed Australia’s largest advice licensee.
Regal Partners has grown funds under management to $12.2 billion and flagged it may consider smaller bolt-on acquisitions, having withdrawn a bid last year for Pacific Current Group.
BT is offering its first private markets managed account on the BT Panorama platform as interest in alternatives grow among high-net-worth investors.
