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
While the number of advisers switching tends to tick up at the end of the year, Padua Wealth Data reveals which business model sees the most adviser loyalty.
Private credit, auditor misconduct and super trustees have been listed among ASIC’s priorities as the regulator unveils its top focus points for the coming year.
Melbourne-based investment manager Woodbridge Capital has appointed an origination director for south-east Queensland, strengthening its foothold in the region as part of its national expansion strategy.
Barings has appointed a new head of Asia Pacific to succeed Duncan Robertson, who will retire after almost two decades with the firm.
