What is a Responsible Manager?
A Responsible Manager is a key individual within a business. ASIC checks the Responsible Managers to ensure that the licensee is “competent” to provide the financial services authorised by their Australian Financial Services Licence (AFSL).
ASIC outlines what they look for when they assess compliance with the ‘organisational competence obligation’ in Regulatory Guide 105 Licensing: Organisational Competence (RG 105).
Responsible Managers must:
- be directly responsible for significant day-to-day decisions about the ongoing provision of financial services;
- be of good fame and character; and
- have the requisite knowledge and skill.
The number of Responsible Managers varies and depends on the nature, scale and complexity of the business.
If a licensee is heavily dependent on the competence of one or two Responsible Managers (e.g. in a small organisation with one or two principals), then ASIC will generally impose a “key person” condition on the licence.
What do Responsible Managers do?
ASIC expects Responsible Managers to play an active role in fostering the compliance culture in the business and in the industry.
How are Responsible Managers nominated?
Responsible Managers must have the relevant knowledge for the provision of the financial services under the licence. This includes knowledge about:
- the financial products and services authorised by the licence;
- licensee obligations; and
- the responsibilities of a Responsible Manager.
In Regulatory Guide 105 Licensing: Organisational Competence (RG105), ASIC provides a number of options whereby applicants can demonstrate organisational competence. FEP has significant experience in this area. We have worked with large major banks, specialised fund managers and small boutique houses. We have also worked with many clients under a ‘key person’ licence condition.
We can support you in the nomination of Responsible Managers under Options 2 and 3.
What if your nominated Responsible Manager has overseas experience only?
If your nominated Responsible Manager has been working outside Australia in recent years, ASIC may seek specific demonstration of knowledge of the regulation of Australian financial services. We offer a short course Regulation of Australian Financial Services which has been designed specifically to meet this need.
If you operate a custodial service, you need to have at least one Responsible Manager with knowledge and skills in relation to the financial service you provide. We offer a specialist short course Introduction to Custody which meets this requirement.
Do Responsible Managers require CPD?
ASIC requires that licensees regularly review and update the competence to provide financial services. This means that Responsible Managers must maintain and update their knowledge and skills.
All Responsible Managers should complete CPD hours each year. We offer online CPD courses specifically designed to assist Responsible Managers in meeting this obligation.
We also offer tailored, in-house Responsible Manager workshops. Please contact us at firstname.lastname@example.org for further information.