Financial Service Licence

The following activities constitute ‘carrying on a financial services business’ in Australia and require an AFSL:

• providing financial product advice;
• dealing in a financial product;
• making a market for a financial product;
• providing a custodial or depository service;
• operating a registered managed investment scheme;
• providing a crowdfunding service;
• providing traditional trustee company services; and
• claims handling is currently expected to be licensed from 30 June 2021.

In general, these activities include any product or service with a predominant investment character and any dealing in that product or service. In addition, the federal government announced in May 2020 that litigation funders would be required to hold an AFSL.

Credit Licence

Activities relating to the following credit products constitute carrying on a credit activity and require an ACL:

• credit contracts;
• credit services (i.e. credit assistance and acting as an intermediary);
• consumer leases;
• mortgages; and
• guarantees, both as the credit provider or as a person that performs the obligations, or exercises the rights, of a credit provider.

Lending

Lending is regulated only if it is to an individual or strata corporation predominantly:

• for personal, domestic or household purposes;
• to purchase, renovate or improve residential property for investment purposes; or
• to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes.

Deposits

Taking money on deposit (other than as a part payment for goods or services) and making advances of money  amounts to banking business and will require an authorised deposit-taking institution (ADI) licence.