Can Your People & Technology Support AFSL Compliance?

Introduction

For Australian Financial Services Licence (AFSL) holders, maintaining adequate human and technological resources is a critical and continuous responsibility. This fundamental requirement, mandated by section 912A(1)(d) of the Corporations Act 2001 (Cth), is essential for an AFS licensee to provide financial services effectively and ensure sustained compliance with all financial services laws.

Inadequate human or technological capacity can severely compromise an AFS licensee’s ability to meet its general obligations, leading to significant compliance failures and potential regulatory action by the Australian Securities and Investments Commission (ASIC). This guide is designed to help AFS licensees evaluate whether their current human and technological resources are sufficient to support their ongoing compliance requirements.

Assessing Your AFSL’s Human Resources for Sustained Compliance Obligations

Evaluating Expertise & Experience of Your Responsible Managers & Compliance Professionals

To ensure your AFSL maintains compliance, it is crucial to evaluate the expertise of your Responsible Managers (RMs) and compliance personnel. Your RMs must possess current and appropriate knowledge, skills, and experience directly relevant to the financial services and products authorised by your AFS licence.

These managers are foundational to your compliance framework, needing an in-depth understanding of financial services laws and the capability to apply this knowledge to significant day-to-day decisions.

Similarly, your compliance professionals should have dedicated expertise in:

• Financial services law
• Ongoing regulatory changes
• Risk management
• The specific sector your AFSL operates within

For complex financial products or services, such as derivatives or Design and Distribution Obligations (DDO), consider whether you have in-house specialists or access to reliable external experts.

The ability of your team to interpret and apply complex regulatory guidance, like that found in ASIC Regulatory Guide 105 for RMs, beyond a superficial understanding is a key indicator of adequate expertise. ASIC’s RG 105 outlines five options for RMs to demonstrate their knowledge and skills, often requiring a combination of qualifications and relevant experience, such as three or more years in the last five for nominated authorisations.

Determining Sufficiency & Appropriate Structure of Your AFSL Human Resources

Assessing the sufficiency and structure of your human resources involves more than just counting staff. It requires ensuring you have enough people to meet all legal obligations, carry out effective monitoring and supervision, and manage current and anticipated operational needs.

The adequacy of your human resources, including your compliance team and Responsible Managers, will depend on the nature, scale, and complexity of your financial services business. An overburdened team constantly “firefighting” issues rather than proactively managing compliance may signal insufficiency.

Key considerations in determining adequacy include:

• Workload and Ratios: Evaluate if the workload is manageable and if the ratio of compliance staff to revenue-generating staff or client numbers is appropriate for your business’s risk profile. While ASIC does not prescribe specific ratios, a very low ratio of compliance staff to representatives can be an indicator of inadequate resources.
• Segregation of Duties: Ensure clear lines of responsibility and, where appropriate, segregation of duties to prevent conflicts of interest and ensure independent oversight.
• Succession Planning: Develop robust succession plans for key compliance personnel and RMs to mitigate risks associated with staff departures. This is particularly important if there is a high concentration of critical compliance knowledge in a few individuals.
• Organisational Structure: The number of RMs, for instance, typically ranges from two to five for most AFS licensees, ensuring adequate coverage and continuity, but this depends on your business’s size and complexity.

Measures to ensure you have enough people should include well-defined recruitment processes, systems for induction, and performance management.

Reviewing Training & Development Programs for Ongoing AFSL Competency

A critical component of assessing your human resources is reviewing the effectiveness of your training and development programs in maintaining ongoing AFSL competency. AFS licensees must ensure their representatives are adequately trained and competent, and that the licensee itself maintains the necessary competence to provide its authorised financial services.

This involves a structured, ongoing training program for all staff on their AFSL obligations, internal policies, procedures, and relevant regulatory updates from ASIC.

Your review should assess:

• Structured Training: The existence and effectiveness of induction training for new staff and specific training tailored to different roles and responsibilities.
• Competency Assessment: How you assess and ensure the ongoing competence of your RMs and representatives. This includes tracking participation in, and completion of, relevant training and Continuing Professional Development (CPD). For example, financial advisers providing retail client advice typically need to meet RG 146 standards and complete ongoing CPD.
• Adaptability to Change: Whether your training programs equip your team to understand and implement changes arising from new legislation, ASIC regulatory guides, or thematic reviews.
• Record Keeping: The maintenance of comprehensive training records, as these are essential for demonstrating compliance.

Effective training programs ensure that staff not only understand their obligations but can also apply them practically, contributing significantly to your AFSL’s compliance health.

Assessing Your AFSL’s Compliance Culture & Leadership Tone

The prevailing compliance culture within your AFS licensee, significantly shaped by the “tone from the top”, is a vital aspect of your human resources assessment. Senior management must actively champion and resource compliance, viewing it not merely as a cost centre but as integral to the business’s integrity and sustainability.

A strong compliance culture fosters an environment where ethical conduct is paramount and compliance is understood as a shared responsibility.

When assessing your compliance culture, consider:

• Leadership Commitment: Does senior management and the board demonstrate a clear and consistent commitment to compliance? This includes allocating adequate resources and visibly supporting compliance initiatives.
• Staff Empowerment: Do compliance staff and other employees feel empowered to raise concerns, report potential breaches, and enforce policies without fear of reprisal? The existence of secure whistleblower systems can be an indicator here.
• Accountability: Are individuals at all levels held accountable for compliance with financial services laws and internal policies?
• Ethical Conduct: Is there an emphasis on ethical decision-making, and are there mechanisms, such as balanced scorecards, that link remuneration to compliance metrics rather than solely to sales targets?

ASIC increasingly looks to boards to demonstrate active oversight and foster a strong compliance culture, understanding that a positive culture significantly enhances the effectiveness of formal compliance systems and human resources.

Examining Monitoring & Supervision Processes for Your Representatives

A key general obligation for an AFS licensee is to take reasonable steps to ensure its representatives comply with financial services laws. Therefore, a thorough examination of your monitoring and supervision processes is essential when assessing your human resources.

You need robust and effective processes to oversee your representatives, ensuring they act in accordance with your AFSL obligations, internal policies, and all applicable laws.

Your examination should cover:

• Representative Oversight: The adequacy of your systems for monitoring the advice and services provided by your representatives. This includes the frequency and depth of reviews, such as periodic reviews of representatives who give personal advice to retail clients.
• Supervisory Capacity: Whether you have enough appropriately skilled compliance staff to carry out these monitoring and supervision activities effectively. A low ratio of compliance staff to representatives, or client accounts not being monitored during staff absences, can indicate deficiencies.
• Internal Audits and Reviews: The regularity and independence of internal reviews or audits that assess the effectiveness of your compliance controls and supervisory arrangements.
• Addressing Issues: How effectively issues identified through monitoring and supervision are addressed, remediated, and used to inform improvements in training or processes.

Failure to maintain adequate monitoring and supervision can expose your AFS licence to significant risk and is a key area of focus for ASIC.

Evaluating Your Technological Resources for AFSL Compliance

Assessing Core Compliance Management Systems & Workflow Automation

To ensure sustained compliance, Australian Financial Services (AFS) licensees must evaluate the adequacy of their core compliance management systems. These systems, often referred to as Compliance Management Systems (CMS) or Governance, Risk, and Compliance (GRC) platforms, play a vital role in managing policies, tracking obligations, and maintaining audit trails.

An effective CMS or GRC platform acts as a centralised hub for all compliance-related activities. The ability to automate routine compliance tasks is a key feature to consider. Workflow automation can significantly enhance efficiency by handling tasks such as:

• Training reminders
• Policy update distributions
• Initial stages of breach reporting workflows

This automation frees up valuable human resources, allowing compliance professionals to concentrate on more strategic, higher-value work that requires human judgment and analysis. For instance, automating the dissemination of updated regulatory guides allows compliance staff to focus on interpreting the implications of those guides for the financial service.

Reviewing Data Management & Analytics Capabilities for Your AFSL

A crucial aspect of your technological resources is the capacity for robust data management and analytics. Your systems must be capable of securely storing and efficiently retrieving all necessary records, including:

• Client interactions
• Advice documents
• Training logs
• Breach reports

All of these must be maintained for statutory periods, typically seven years. Ensuring data integrity is paramount; there must be controls in place to maintain the accuracy and completeness of the data that underpins your compliance framework.

Furthermore, your technological resources should enable you to generate meaningful compliance reports. These reports are essential for:

• Identifying compliance trends
• Pinpointing emerging risks
• Highlighting areas of non-compliance within your financial service

The ability to easily provide accurate data to ASIC upon request is also a critical capability. For example, systems should be able to quickly collate all communications related to a specific financial product if required by ASIC.

Considering RegTech Solutions for Enhanced AFSL Compliance

AFS licensees should consider the adoption of Regulatory Technology (RegTech) solutions to bolster their compliance efforts. RegTech can offer sophisticated tools for a variety of compliance functions, leading to greater efficiency and effectiveness. These solutions can be particularly beneficial for:

• Transaction Monitoring: Identifying suspicious or non-compliant activities related to Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) obligations, market abuse, or Design and Distribution Obligations (DDO). For example, RegTech can flag unusual transaction patterns that might indicate market manipulation.
• Communication Surveillance: Monitoring electronic communications, such as emails and chat messages, to ensure adherence to advice standards and market conduct rules. This helps in proactively identifying potential misconduct by representatives.
• Identity Verification: Utilising robust digital identity verification tools for Know Your Customer (KYC) processes, which is fundamental for AML/CTF compliance and fraud prevention.
• Breach Reporting and Management: Facilitating the timely identification, assessment, and reporting of significant breaches to ASIC, streamlining a critical and time-sensitive regulatory requirement.

While RegTech offers significant advantages, it’s important to select solutions that are appropriate for the nature, scale, and complexity of your financial service business.

Evaluating Cybersecurity & Data Security Measures for Your Financial Service

The evaluation of cybersecurity and data security measures is a critical component of assessing your technological resources. Given the sensitive client and financial data that AFS licensees hold, robust cybersecurity measures are not just advisable but essential.

ASIC has a significant focus on this area, and failures can lead to severe consequences, including enforcement actions. Regular testing of your cybersecurity posture is vital to identify and address weaknesses proactively. This testing can be conducted through methods such as:

• Penetration testing
• Vulnerability assessments

A clear and practiced cyber incident response plan is also a necessity. This plan should outline the steps to be taken in the event of a cyber-attack or data breach, ensuring a swift and effective response to minimise harm.

The case of RI Advice Group, which faced ASIC action due to cybersecurity attacks revealing issues like outdated antivirus software and poor password practices, underscores the importance of these measures. Similarly, ASIC’s proceedings against FIIG Securities for alleged failures in maintaining basic cyber protections, including not having firewalls properly monitored and failing to patch software, highlight the regulator’s expectations.

Checking System Integration & Scalability for Future AFSL Needs

When evaluating your technological resources, it is important to assess the integration of your various systems. Effective integration between systems is crucial, including:

• Customer Relationship Management (CRM) software
• Advice platforms
• Accounting systems
• Compliance tools

Poor integration often leads to excessive manual data re-entry, which is not only inefficient but also increases the risk of errors that can impact compliance. Seamless data flow between systems enhances accuracy and provides a more holistic view of your operations.

Equally important is the scalability of your technology stack. Your systems must be able to adapt to business growth and evolving regulatory requirements without necessitating major overhauls. As your financial service business expands or as new financial products are introduced, your technology must be capable of handling:

• Increased data volumes
• Growing user numbers
• New functionalities

A scalable technology infrastructure ensures that your AFSL compliance framework can remain robust and effective in the long term, supporting sustained compliance.

The Critical Interplay Between Your AFSL’s Human & Technological Resources for Sustained Compliance

How Technology Augments Human Capabilities in AFSL Compliance

Technology plays a crucial role in enhancing the capabilities of human resources within an AFS licensee’s compliance framework. By automating routine and data-intensive tasks, technological solutions can free up skilled compliance professionals, allowing them to dedicate their expertise to more strategic activities.

For instance, technology can streamline various processes including:

• Regulatory change management
• Client onboarding
• Monitoring of transactions and communications

Furthermore, advanced analytical tools and RegTech solutions empower AFS licensees by improving data quality and providing deeper insights for decision-making. These systems can:

• Conduct broad-scale monitoring and identify anomalies or potential breaches in real-time
• Generate alerts for suspicious activities, enabling human staff to investigate and respond promptly
• Automate the generation of compliance reports for internal oversight and regulatory submissions

This augmentation allows your human resources to shift their focus from manual processing to critical oversight, nuanced judgment, and the strategic management of compliance risks. For example, AI-powered speech analytics can scan advisor-client interactions for potential issues, flagging them for human review, while digital registers can automate the logging and alerting of conflicts of interest. Ultimately, technological outputs provide your team with better data, enabling more informed and effective decision-making in managing your AFSL compliance obligations.

The Need for Skilled Users to Maximise AFSL Technology Benefits

The successful integration of technology into your AFSL compliance framework is heavily reliant on the skills and training of your personnel. Even the most sophisticated technological tools will prove ineffective if your staff are not adequately trained to use them correctly and to accurately interpret their outputs.

Skilled and knowledgeable human resources are essential for:

• Selection and implementation of compliance technologies
• Management of technological systems
• Critical oversight of automated processes
• Accurate interpretation of technological outputs

A failure to invest in training or to ensure staff sufficiency in managing and interpreting technological outputs can lead to significant compliance failures. For example, if advanced alert systems generate warnings that are not promptly or effectively reviewed by sufficiently trained personnel, the benefits of the technology are nullified, potentially masking serious issues.

Key Indicators Your AFSL’s Human & Technological Resources Are Insufficient for Compliance Requirements

Human Resource Deficiency Indicators for Your AFSL

Identifying whether your AFSL has inadequate human resources is crucial for maintaining ongoing compliance obligations. Several key indicators, as highlighted by ASIC in Regulatory Guide 104, can signal that your human capital may not be sufficient for the nature, scale, and complexity of your financial service business.

An overburdened compliance team, often caught in a cycle of “firefighting” rather than proactive compliance management, is a significant red flag. Persistent issues in this area can severely compromise your ability to meet your general obligations under the Corporations Act 2001 (Cth). Recognising these signs early allows an AFS licensee to take corrective action.

Some common indicators include:

Indicator	Description
Rising Client Complaints	An increase in client complaints or disputes may indicate inadequate staff training, insufficient oversight, or resource constraints affecting service quality. Regular monitoring of complaint trends and root cause analysis is essential for maintaining compliance and client satisfaction.
High Staff Turnover in Key Roles	Frequent departures of staff in critical compliance, risk management, or client-facing positions can compromise institutional knowledge, create gaps in oversight, and impact the organisation’s ability to meet regulatory obligations consistently.
Low Ratio of Compliance Staff	Insufficient compliance personnel relative to business size and complexity creates risks of inadequate monitoring, delayed reporting, and inability to maintain effective compliance frameworks. The ratio should align with business complexity and regulatory requirements.
Delays in Meeting Regulatory Obligations	Persistent delays in submitting required reports, responding to regulatory inquiries, or implementing regulatory changes suggests resource constraints and potential non-compliance. This includes breach reporting, audit requirements, and regulatory correspondence.
Inexperienced Staff and Vacant Positions	Key positions remaining unfilled or being occupied by staff lacking adequate experience and qualifications can compromise decision-making quality, regulatory compliance, and risk management effectiveness across the organisation.
Lapses in Monitoring	Failures in regular monitoring activities, including client file reviews, transaction monitoring, advice quality assurance, and compliance testing, indicate resource inadequacy and create significant regulatory and reputational risks.
Overwhelmed Staff and Unprioritised Compliance	Staff consistently working beyond capacity with compliance activities being deprioritised or delayed indicates systemic resource deficiency. This creates risks of errors, burnout, and regulatory breaches due to inadequate attention to compliance requirements.

Technological Resource Deficiency Indicators for Your AFSL

Just as with human capital, the technological resources of an AFS licensee must be adequate to support its compliance obligations. Outdated or insufficient technology can create significant risks and inefficiencies for your financial service.

ASIC expects AFS licensees to regularly review the adequacy of their technological resources, and several signs can indicate deficiencies in this area. An over-reliance on manual processes for key compliance tasks that are error-prone and time-consuming is a primary indicator of technological shortcomings.

These deficiencies can hinder your ability to comply with financial services laws and protect client data. Identifying these indicators is essential for any AFS licensee aiming for sustained compliance.

Key signs of inadequate technological resources include:

Indicator	Description
Outdated Systems and Software	Outdated or unsupported systems and software expose financial service businesses to security risks and make it challenging to comply with modern regulatory requirements.
Frequent System Downtimes or Poor Performance	Recurring system failures, slow performance, or inability to handle business needs can suggest insufficient investment in technological infrastructure.
Inadequate Data Management and Security	Weak data governance or security measures contribute to risks such as data breaches, non-compliance with privacy laws, and loss of client trust.
Lack of Robust Disaster Recovery and Business Resumption Capacity	A lack of comprehensive disaster recovery plans and business continuity procedures puts the organisation at risk of prolonged service disruptions during crises.
Poor Audit Outcomes Related to Systems	Audit findings that highlight deficiencies in IT systems or processes suggest a need for immediate attention to align with regulatory standards.
Inability to Adapt to New Regulatory Requirements	Delays or failures to implement regulatory technology (RegTech) solutions and integrate compliance measures into systems reflect technological insufficiencies.
Over-reliance on Manual Processes	Using manual procedures rather than automated systems increases the risk of errors, inefficiencies, and difficulties in maintaining regulatory compliance.

Consequences of Inadequate AFSL Human & Technological Capacity

Potential ASIC Enforcement Actions & Financial Penalties for Your AFSL

ASIC takes the obligation to maintain adequate human and technological resources under section 912A(1)(d) of the Corporations Act 2001 (Cth) very seriously. Failure to meet this requirement can lead to a range of enforcement actions, including:

• Infringement Notices: ASIC may issue infringement notices for breaches related to insufficient resources, which carry financial penalties.
• Enforceable Undertakings: Licensees may be required to enter enforceable undertakings that often involve significant remediation efforts and independent expert reviews.
• Additional Licence Conditions: ASIC can impose extra conditions on an Australian Financial Services Licence (AFSL) to ensure compliance.
• Suspension or Cancellation of Licence: In severe cases, ASIC may suspend or cancel the AFSL, effectively halting the licensee’s ability to provide financial services.

Financial penalties can be substantial. For corporations, penalties may reach:

• The greater of 50,000 penalty units (approximately $15.65 million as of early 2025)
• Three times the benefit derived or detriment avoided
• 10% of annual turnover (capped at 2.5 million penalty units)

Individuals, including Responsible Managers and directors, can also face significant fines.

ASIC’s enforcement actions against firms illustrate the consequences of inadequate resourcing. For example:

• Lanterne Fund Services was fined $1.25 million for systemic compliance failures due to insufficient staff and outdated IT systems
• FIIG Securities faced proceedings for prolonged cybersecurity deficiencies, including failures in firewall monitoring, patching, and staff training

These cases underscore that ASIC views resource inadequacy as a direct breach of core licence obligations, not merely operational shortcomings.

Reputational Damage & Operational Disruption to Your Financial Service

Beyond regulatory sanctions, inadequate human and technological capacity can severely damage a licensee’s reputation and disrupt operations:

• Loss of Client Trust: Compliance failures often result in diminished confidence from clients and partners, which can lead to:
  • Client attrition
  • Difficulty attracting new business
• Market Reputation Damage: Public regulatory actions and enforcement proceedings can tarnish a licensee’s standing in the financial services industry, impacting long-term viability.
• Remediation Costs: Addressing compliance failures requires significant expenditure on:
  • Fixing underlying issues
  • Compensating affected clients
  • Engaging external consultants or auditors
• • Management Distraction: Compliance crises divert senior management’s attention and resources away from core business activities, impairing strategic focus and operational efficiency.

Imagine a scenario where a licensee’s cybersecurity breach exposes client data due to inadequate technological safeguards and insufficient staff oversight. The resulting regulatory investigation, client loss, and remediation expenses could cripple the business’ reputation and finances. Similarly, a licensee with an understaffed compliance team may fail to detect and report breaches promptly, leading to escalating regulatory penalties and operational chaos.

Strategies to Ensure Sufficient Human & Technological Capacity for Your AFSL Licence Compliance

Conducting Regular & Honest Assessments of Your AFSL Resource Needs

To maintain sustained compliance with your AFSL obligations, it is imperative to conduct regular and honest assessments of your human and technological resource needs. These periodic reviews allow an AFS licensee to evaluate whether current capacities align with ongoing compliance requirements and the specific risk profile of the financial service.

Ideally, these assessments should be performed:

• At least annually
• Whenever significant business changes occur
• When regulatory changes are introduced

Such assessments should be a continuous, “living” process, responsive to both internal developments, like new financial product offerings, and external shifts, such as new regulatory guides from ASIC.

The evaluation must be comprehensive, considering the nature, scale, and complexity of your operations. For human resources, this involves assessing not just staff numbers but also the skills, competencies, and organisational structure, particularly for Responsible Managers and compliance personnel. Similarly, technological resources require regular review to ensure they adequately support all compliance obligations, including data integrity, security, and operational needs.

Key aspects to scrutinise during these assessments include:

• Alignment with Obligations: Ensuring that both human and technological resources are sufficient to meet all general obligations under the Corporations Act 2001 (Cth) and specific financial services laws.
• Risk Profile Consideration: Evaluating resources against the evolving risk landscape of your financial services business, including operational, compliance, and cybersecurity risks.
• Impact of Change: Assessing the impact of significant changes, such as business growth, new financial products or services, adoption of new technologies, or amendments to regulatory requirements, on existing resource adequacy.
• Sufficiency and Effectiveness: Determining if there are enough people with the right skills and experience, and if technological systems are robust and effective for current and anticipated operational needs.

Strategic Investment in People & AFSL Compliance Technology

Viewing compliance resourcing as a strategic investment, rather than merely a cost, is fundamental for an AFS licensee aiming for sustained compliance. This approach involves a commitment to allocating sufficient budget to ensure that both human capital and technological infrastructure are robust enough to meet the demands of the financial services laws and your AFSL conditions.

Strategic investment in people means ensuring you have individuals with the appropriate skills, experience, and mindset in key compliance and Responsible Manager positions. Investing wisely in technology is equally crucial. This involves identifying and implementing appropriate RegTech solutions that genuinely address compliance pain points and enhance efficiency and effectiveness.

It’s important not to adopt technology for its own sake, but to select solutions that are fit-for-purpose, scalable, and integrate well with existing systems. For instance, allocating a percentage of revenue to compliance automation or API-driven monitoring can be a strategic move.

Effective strategic investment encompasses:

• Prioritising Key Roles: Ensuring that Responsible Managers and compliance professionals possess the necessary expertise and are adequately supported.
• Targeted Technology Adoption: Implementing RegTech solutions for areas such as regulatory change management, transaction monitoring, data analytics, and breach reporting, tailored to the specific needs and risk profile of your financial service.
• Budget Allocation: Ensuring annual budgets explicitly cover compliance staffing, ongoing training, technology upgrades and maintenance, and professional indemnity insurance.
• Long-Term Sustainability: Making investment decisions that support the long-term integrity and sustainability of your financial services business, rather than opting for short-term fixes.

Fostering Continuous Training & a Strong AFSL Compliance Culture

A cornerstone of maintaining adequate human resources for your AFS licence is fostering a culture of continuous learning and development regarding compliance obligations. This involves implementing robust and ongoing training programs for all staff, especially Responsible Managers and those involved in providing financial services.

Such programs should cover:

• Financial services laws
• Regulatory updates from ASIC
• Internal policies and procedures
• Specific financial product knowledge

Systems for inducting and training new staff are essential measures in this regard.

Beyond formal training, cultivating a strong AFSL compliance culture throughout the organisation is paramount. This begins with a clear commitment from senior management and leadership, who must actively champion and resource compliance, viewing it as integral to the business’s integrity.

An effective compliance culture ensures that:

• Ethical Conduct is Prioritised: An environment where ethical decision-making is paramount and compliance is understood as a shared responsibility across all levels of the AFS licensee.
• Staff are Empowered: Compliance personnel and other employees feel empowered to raise concerns, report potential breaches, and enforce policies without fear of reprisal. Implementing secure whistleblower systems can support this.
• Accountability is Clear: Individuals are held accountable for adhering to compliance obligations and internal policies.
• Continuous Improvement is Encouraged: The organisation actively seeks to learn from compliance experiences, including near misses or breaches, to strengthen its framework.

Documenting AFSL Resource Assessments & Compliance Measures

Maintaining clear and comprehensive records of your AFSL resource assessments, training programs, system configurations, and compliance monitoring activities is crucial for demonstrating due diligence and meeting your general obligations. ASIC expects AFS licensees to document their compliance measures in some form, as this helps demonstrate whether they are complying with the Corporations Act 2001 (Cth).

This documentation should detail who is responsible for various compliance tasks, the timeframes involved, and associated record-keeping and reporting protocols. Thorough documentation serves multiple purposes: it provides an audit trail for regulatory scrutiny, facilitates internal reviews and continuous improvement, and ensures consistency in the application of compliance procedures.

For an AFS licensee, this means keeping records of:

• Resource Assessments: Documenting periodic reviews of human and technological resources, including the rationale for staffing levels and technology choices relative to the nature, scale, and complexity of the financial service.
• Training and Competency: Maintaining detailed training logs for all staff, including Responsible Managers, covering induction, ongoing professional development (CPD), and any competency assessments.
• System Configurations and Security: Keeping records of IT system configurations, cybersecurity measures, disaster recovery plans, and any testing or audits performed on these systems.
• Compliance Monitoring Activities: Documenting the processes and outcomes of monitoring and supervision of representatives, internal audits, and reviews of compliance effectiveness.
• Policies and Procedures: Ensuring all compliance-related policies and procedures are documented, regularly updated, and easily accessible to relevant staff.

Conclusion

Ensuring your AFSL is supported by adequate human and technological resources is a fundamental and ongoing obligation for sustained compliance with financial services laws, as mandated by the Corporations Act 2001 (Cth). A thorough evaluation of your personnel’s expertise and sufficiency, coupled with an assessment of your technological infrastructure’s robustness and adaptability, is critical to meeting your general obligations and avoiding significant compliance failures.

If you are seeking to bolster your AFSL compliance framework and ensure your human and technological capacities are sufficient, contact AML House today. Our experts provide specialised legal and consulting services to help your financial service navigate complex regulatory requirements and transform these challenges into strategic opportunities.

Frequently Asked Questions