Introduction to the B1 Organisational Competence Proof
Applying for an Australian Financial Services Licence (AFSL) necessitates that applicants demonstrate organisational competence to ASIC. This demonstration is a crucial aspect of a successful application, as ASIC is responsible for assessing applications to ensure that only competent entities are authorised to provide financial services in Australia. The B1 Organisational Competence proof document is identified as a core proof document that applicant must provide to ASIC as part of their AFSL application lodgement.
This guide will explain the B1 Organisational Competence proof in detail, focusing on its key components and how it demonstrates the competency of responsible managers. For applicants applying for an AFSL, understanding the requirements of the B1 proof is essential for navigating the AFSL application process and ensuring a successful application.
What is the B1 Organisational Competence Proof?
Demonstrating Organisational Competence for AFS Licensing
The B1 Organisational Competence proof is a fundamental document required by ASIC for all AFSL applicants. This core proof is essential for demonstrating that your business has the organisational competence to provide the financial services and products you are seeking authorisation for. Furthermore, ASIC uses the B1 proof to assess whether your business can meet the ongoing obligations of an Australian financial services (AFS) AFS licensee, ensuring that licensees are competent and capable in the financial services they offer.
The Role of Responsible Managers in B1 Proof
The B1 proof specifically focuses on the competence of your responsible managers because ASIC assesses your organisation’s competence through these individuals. Responsible managers are pivotal as they are accountable for the day-to-day significant decisions within your financial services business. Therefore, in your B1 proof, you must detail the relevant experience and qualifications of each responsible manager, including:
Relevant Experience: Outline the professional experience that qualifies each manager; and
Qualifications: Provide information on the educational and professional qualifications held by each manager.
It is their competency that ASIC evaluates to determine your organisation’s overall competence.
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Key Components of the B1 Organisational Competence Proof
Table of Organisational Competence
A core component of the B1 organisational competence proof is the Table of Organisational Competence. This table is essential for your AFSL application as it allows ASIC to assess whether your responsible managers possess the necessary organisational competence. You must clearly present each responsible manager’s relevant experience and qualifications in this table.
To ensure ASIC can properly evaluate if your responsible managers have the competency to oversee the financial services and financial products your business intends to provide under the AFSL, the information provided must directly relate to the specific financial service authorisations you are seeking in your application.
Submission on Responsible Manager’s Competence (If Applicable)
In certain situations, you may need to include a Submission on Responsible Manager’s Competence as part of your B1 organisational competence proof. This submission is necessary if you are using Option 5, known as “Other demonstration of knowledge and skills,” to demonstrate the competence of a responsible manager. Additionally, this requirement applies if a nominated person will be acting as a responsible manager for multiple AFS licensees.
If a responsible manager is overseeing multiple AFS licensees, you must provide a submission that demonstrates your business will still meet its ongoing organisational competence obligations. This submission needs to detail:
Time Allocation: Describe how the responsible manager will allocate their time to effectively perform their role for your AFSL and their responsibilities to other AFS licensees; and
Conflict of Interest Management: Explain how you will manage any potential conflicts of interest that may arise from the responsible manager acting for multiple AFS licensees.
This submission provides an opportunity to elaborate on a responsible manager’s skills, knowledge, and experience in detail, especially when relying on Option 5 to demonstrate competency. Furthermore, it addresses potential concerns when a responsible manager has responsibilities across multiple AFS licensees, ensuring ASIC that organisational competency will be maintained.
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How to Complete and Lodge the B1 Organisational Competence Proof
Utilising the Table of Organisational Competence Template
To assist applicants in preparing their B1 organisational competence proof, ASIC provides a template that can be used for the Table of Organisational Competence. Applicants are encouraged to utilise this template, or a similar format, to ensure that all necessary information is presented in a clear and structured manner for their AFSL application. Using a template ensures that you include all the details ASIC needs to assess the organisational competence of your responsible managers.
The ASIC Regulatory Guide 2 includes an example of the Table of Organisational Competence in Appendix 2.
This example demonstrates how to effectively present the required information. Applicants can adapt this template to accurately reflect the experience and qualifications of their responsible managers in relation to the financial services and financial products they intend to provide under their AFSL.
Submitting the B1 Proof with Your AFSL Application
The B1 organisational competence proof is a core proof document that must be submitted as part of your application for an AFSL. It is crucial to lodge the B1 proof alongside your completed Form FS01 (i.e. the ‘Application for AFS Licence’) and other core proof documents. All these documents should be submitted together to ASIC through the ASIC MOVEit portal.
Submitting all required documents, including the B1 organisational competence proof, at the same time is essential for a successful application. Failure to submit all core proof documents together may result in ASIC rejecting your application for lodgement. Therefore, ensure that your B1 proof is completed and ready for submission when you lodge your AFSL application to avoid delays or rejection in the application process.
Conclusion
The B1 Organisational Competence proof is a critical document in your AFSL application. A well-prepared B1 proof is essential for demonstrating to ASIC that your business, through its responsible managers, possesses the necessary organisational competence. This demonstration is not just a formality, but a fundamental requirement to assure ASIC of your capability to operate an AFS licensed financial services business effectively and in compliance with regulatory obligations.
Navigating the complexities of AFS licensing and preparing the B1 Organisational Competence proof can be challenging. For expert guidance and support throughout your AFSL application process, schedule a free initial consultation with AFSL House today. With a 100% AFSL application success rate, our team’s unparalleled expertise in Australian Financial Services licensing ensures you are well-equipped to navigate every step, increasing your prospects for a successful application and authorisation to provide financial services and products under an AFSL.
Frequently Asked Questions about the B1 Organisational Competence Proof
If you do not submit the B1 Organisational Competence proof with your Form FS01Â and other core proof documents, your application will be considered incomplete. Incomplete applications may be rejected by ASIC for lodgement, meaning your application will not be accepted or assessed. It is essential to ensure all core proof documents, including the B1 organisational competence proof, are submitted to avoid potential delays or rejection of your AFSL application.
Yes, if you are applying to vary your AFSL, you will likely need to submit a B1 Organisational Competence proof. Specifically, if you are seeking to vary your financial service or financial product authorisations, or the key person condition on your licence, providing a B1 proof is necessary. This ensures ASIC can assess your organisational competence in light of the proposed changes to your AFSL.
No, you cannot submit generic B1 proof documents as part of your AFSL application. ASIC requires that your B1 Organisational Competence proof be specifically tailored to your business and the particular financial services and financial products for which you are seeking authorisation. Generic proofs that do not directly relate to your proposed business activities and authorisations may not adequately demonstrate your organisational competence and could potentially delay the assessment of your application.
‘Option 5’ for demonstrating responsible manager competence is formally known as ‘Other demonstration of knowledge and skills’. This option serves as an alternative pathway to demonstrate the competency of a responsible manager, particularly when their qualifications and experience do not strictly align with the criteria outlined in Options 1 through 4. Under Option 5, you can provide a detailed submission to ASIC, thoroughly explaining how a responsible manager’s specific skills, knowledge, and experience demonstrate their competence to oversee the relevant financial services and products, even if they do not meet the standard qualifications or industry benchmarks set out in other options.
You can find an example of the Table of Organisational Competence in Appendix 2 of ASIC Regulatory Guide 2 (RG 2) AFS Licensing Kit: Part 2—Preparing your AFSL application or variation application. This appendix provides a sample table that demonstrates how to effectively present the required information about your responsible managers’ experience and qualifications. Applicants can use this example as a guide to ensure they include all necessary details in a clear and structured format for their B1 organisational competence proof.
If your nominated responsible manager is also a responsible manager for another AFS licensee, you must provide a submission within your B1 Organisational Competence proof that addresses this situation. This submission should clearly detail how the responsible manager will effectively allocate their time and resources to fulfil their duties for your AFSL, while also managing their responsibilities to another licensee. Furthermore, the submission should outline the measures in place to manage any potential conflicts of interest that may arise due to their dual roles.
No, the B1 Organisational Competence proof is not a core proof document required for Foreign Financial Services Providers (FFSPs) applying for a foreign AFSL. The streamlined application process for foreign AFSLs recognises that these entities are already authorised to provide financial services in overseas regulatory regimes. Therefore, FFSPs are exempt from needing to demonstrate organisational competence through a B1 proof in the same way as standard AFSL applicants.
‘People Proofs’ are a set of separate core proof documents, distinct from the B1 Organisational Competence proof. These documents include a Statement of Personal Information, a copy of a national criminal history check, and a copy of a bankruptcy check. While People Proofs and the B1 proof are both core components of an AFSL application and are related to demonstrating the competence and fit and proper nature of responsible managers and fit and proper people, People Proofs are not considered part of the B1 Organisational Competence proof itself.
Yes, AFSL House can indeed assist you with preparing your B1 Organisational Competence proof as part of your AFSL application. While the resources provided are from ASIC, AFSL House offers expertise to help you navigate the complexities of the AFS licensing process. This includes guidance on understanding the specific requirements for the B1 proof and ensuring your application comprehensively demonstrates your organisational competence to ASIC.