What is a Responsible Manager?
Responsible Managers are the people that a licensee appoints to demonstrate to ASIC that it has the knowledge, skills and experience required to provide the financial services it is authorised to on its Australian Financial Services licence (AFSL). They are responsible for ensuring that how a licensee delivers its financial products and services complies with its general obligations of AFSL holders.
These are detailed in s912A of the Corporations Act, and ASIC offers regulatory guidance in RG 104 Licensing: Meeting the general obligations.
RG 105 Licensing: Organisational Competence contains detailed information about who is eligible to be nominated as a Responsible Manager, and ongoing professional development requirements.
A Responsible Manager is a key individual within a business. They can supervise operations in a few ways:
- Oversee the conduct of authorised representatives who trade financial instruments or provide advice
- Be a company director appointed as a responsible manager
- Serve purely as a responsible manager, monitoring licensing compliance and conduct risks.
Checking the credentials of Responsible Managers is one aspect of how ASIC evaluates whether a licensee is ‘competent’ to provide the financial services specified under its AFSL. In the course of assessing licensee compliance with the ‘organisational competence obligation’ in RG 105, ASIC will expect that Responsible Managers:
- are directly responsible for significant day-to-day decisions about the ongoing provision of financial services;
- are of good fame and character; and
- have the requisite knowledge, skills and experience.
How many Responsible Managers a licensee should ideally appoint 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.